<PAGE>

                                                                    EXHIBIT 10.2

                            STOCK PURCHASE AGREEMENT

      THIS STOCK PURCHASE AGREEMENT (this "Agreement") is executed and delivered
as of August 10, 2004, by and between North Country Financial Corporation, a
Michigan corporation registered as a bank holding company ("North Country"), and
NCFC Recapitalization, LLC, a Michigan limited liability company ("NCFC
Recapitalization"), individually and on behalf of the "Investors" that subscribe
for shares of North Country common stock and become a party to this Agreement as
contemplated in Section 2.1. Capitalized terms used in this Agreement and not
otherwise defined have the respective meanings in Schedule 1.

                                   WITNESSETH:


      WHEREAS, the Bank is a wholly owned subsidiary of North Country; and

      WHEREAS, on March 26, 2003, the FDIC and OFIS, with the consent of the
Bank, entered the Order under Federal and State banking laws. The Order
identifies deficiencies in the Bank and requires the Bank and its directors to
take specified steps to address the deficiencies; and

      WHEREAS, as part of its efforts to address certain of the issues
identified in the Order, North Country began discussions with investment banking
firms to determine the feasibility of recapitalizing North Country and also
began discussions with regard to a sale of North Country; and

      WHEREAS, in connection with these matters, North Country and Mackinac
Partners, LLC ("Mackinac Partners") entered into the Confidentiality Agreement
and the Exclusivity Agreement; and

      WHEREAS, North Country and NCFC Recapitalization have been discussing the
terms and conditions of a possible investment arrangement pursuant to which
North Country would offer shares of common stock to prospective interested
investors, North Country would be recapitalized (including redemption of North
Country's outstanding trust preferred securities), the Boards of Directors of
North Country and its Subsidiaries would be reconstituted, and North Country's
and its Subsidiaries' names would be changed; and

      WHEREAS, NCFC Recapitalization has been organized for the purpose of
entering into this Agreement and performing the obligations imposed on it by
this Agreement; and

      WHEREAS, the parties are entering into this Agreement as part of North
Country's efforts to address the requirements of the Order, including to provide
to North Country capital and additional management resources, and to set forth
the parties' representations, warranties, covenants and undertakings.

      NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:

               Article 1 Offering of Common Stock of North Country

1.1 Summary of Terms of the Offering. The Summary of Terms attached as Schedule
2 sets forth certain of the terms of the Offering of North Country Shares by
North Country to prospective Investors identified by the Placement Agents as
contemplated by this Agreement.

1.2 Exempt Offering by North Country. The offer and sale of the North Country
Shares to prospective Investors shall be made by North Country in accordance
with the Offering Documents to be prepared by North Country and pursuant to
exemptions from the registration and prospectus delivery requirements of the
Securities Act, MUSA and all other state securities laws afforded by Rule 506
under Regulation D and other applicable exemptions under applicable state
securities laws.

1.3 Definitive Subscription Documents. Any acquisition of North Country Shares
by prospective Investors will only be made on the terms and conditions set forth
in this Agreement and to be set forth in the Definitive Subscription Documents
to be prepared, negotiated, executed and delivered by North Country and the
Investors.

<PAGE>

1.4 Placement Agents. North Country shall engage the Placement Agents to act as
placement agents for North Country in respect of the Offering. The terms and
conditions of the engagement of the Placement Agents by North Country shall be
as set forth in one or more engagement agreements between the Placement Agents
and North Country.

                           Article 2 Purchase and Sale

2.1 Procedure to Become an Investor.

      (a) A Person desiring to become an Investor under this Agreement must (i)
qualify as an Accredited Investor, (ii) have received all Offering Documents,
and (iii) complete, execute and deliver to a Placement Agent the Definitive
Subscription Documents within the time specified in the Definitive Subscription
Documents. All Definitive Subscription Documents submitted by a prospective
Investor shall be irrevocable by the prospective Investor.

      (b) No Person shall become an "Investor" under this Agreement unless and
until North Country shall have accepted the Person as an Investor as provided in
the Definitive Subscription Documents. When so accepted by North Country, the
Investor shall become a party to this Agreement as an Investor. North County
shall give notice to each Person submitting Definitive Subscription Documents as
to whether such Person has been accepted as an Investor under this Agreement not
later than the earlier of the second Business Day after the Closing Deadline or
the Closing Date.

2.2 Acceptance of the Subscriptions. The acceptance of Definitive Subscription
Documents by North Country shall constitute the binding obligation by the
Investor to subscribe for and purchase from North Country, and of North Country
to issue and sell to the Investor, the North Country Shares indicated in the
Definitive Subscription Documents, on the terms and subject to the conditions
set forth in this Agreement and the Definitive Subscription Documents and
subject to the proration provisions of the Definitive Subscription Documents if
applicable.

                         Article 3 Pre-Closing Covenants

3.1 Certain Covenants of North Country.

      (a) Between the date of this Agreement and the Closing Date, North Country
agrees to give to NCFC Recapitalization and its respective representatives and
agents full access (to the extent lawful) to all of the premises, books, records
and employees of North Country and its Subsidiaries at all reasonable times and
to furnish and cause its Subsidiaries to furnish to NCFC Recapitalization, the
investors and their respective agents and representatives access to and true and
complete copies of such financial and operating data, all documents with respect
to matters to which reference is made in this Agreement or on any list, schedule
or certificate delivered or to be delivered in connection herewith and such
other documents, records, or information with respect to the businesses and
properties of North Country and its Subsidiaries as NCFC Recapitalization, any
of the Investors or their respective agents or representative shall from time to
time reasonably request; provided, however, that any such inspection (i) shall
be conducted in such manner as not to interfere unreasonably with the operation
of the business of the entity inspected and (ii) shall not affect any of the
representations and warranties hereunder.

      (b) Between the date of this Agreement and the Closing Date, and except as
agreed to herein or otherwise permitted hereby, North Country agrees, on behalf
of itself and each of its respective Subsidiaries:

            (i) That North Country and its Subsidiaries shall (A) except as
      contemplated in this Agreement conduct their business only in the ordinary
      course consistent with current practices, (B) maintain their books and
      records in accordance with current practices and (B) use all reasonable
      efforts to preserve intact their business organizations and assets, to
      maintain their rights, franchises and existing relations with customers,
      suppliers, employees and business associates and to take no action that
      would (1) adversely affect the ability of any of them to obtain any
      Regulatory Approvals or which would reasonably be expected to hinder or
      delay receipt of such Regulatory Approvals or (2) adversely affect its
      ability to perform its obligations under this Agreement or any of the
      Definitive Subscription Documents;

            (ii) That North Country and its Subsidiaries shall comply with the
      Order, except for the Order's requirements with respect to additional
      capital since those requirements are being addressed by this Agreement.

<PAGE>

            (iii) That North Country and its Subsidiaries shall not: (A)
      declare, set aside or pay any dividend or make any other distribution with
      respect to its capital stock, except for dividends or distributions by a
      wholly owned Subsidiary of North Country to North Country; (B) reacquire
      or buy any of its outstanding shares; (C) issue or sell any shares of
      capital stock of it or any of its Subsidiaries, except shares issued
      pursuant to exercise of stock options previously issued and identified in
      the Disclosure Schedule; (D) effect any stock split, stock dividend,
      reverse stock split or other reclassification or recapitalization of its
      common stock; or (E) grant any options or issue any warrants exercisable
      for or securities convertible or exchangeable into capital stock of it or
      any of its Subsidiaries or grant any stock appreciation or other rights
      with respect to shares of capital stock of it or of any of its
      Subsidiaries; or (F) take any action (including any action by its Board of
      Directors (or any committee thereof) to adjust in any way either the
      number of shares of North Country covered by any outstanding North Country
      Stock Options, or the exercise price of any of the options, whether
      pursuant to the terms of such Plans or otherwise.

            (iv) That North Country and its Subsidiaries shall not: (A) sell,
      dispose of or pledge any assets of it or of any of its Subsidiaries other
      than in the ordinary course of business consistent with current practices
      or to borrow funds consistent with the provisions hereinafter contained;
      (B) merge or consolidate it or any of its Subsidiaries into another entity
      or acquire any other entity, or acquire any significant assets; (C) sell
      or pledge or agree to sell or pledge or permit any lien to exist on any
      stock of any of its Subsidiaries owned by it; (D) change the articles of
      incorporation or certificate of incorporation, charter, bylaws or other
      governing instruments of it or any of its Subsidiaries; (E) engage in any
      lending activities other than in the ordinary course of business
      consistent with current practices; (F) form any new subsidiary or cause or
      permit a material change in the activities presently conducted by any
      Subsidiary or make additional investments in subsidiaries; (G) except to
      hedge interest rate risk on certificates of deposits or mortgage servicing
      rights, or to hedge interest rate risk and/or credit risk on commitments
      to extend consumer credit secured by residential mortgage loans, engage in
      any off balance sheet interest rate swap arrangement, (H) engage in any
      activity as would cause any of its representation and warranties in this
      Agreement or in any of the Definitive Subscription Documents to not be
      correct or complete as if being made continuously through the Closing
      Date, (I) purchase any equity securities other than Federal Home Loan Bank
      stock or incur or assume any indebtedness except in the ordinary and usual
      course of business; (J) authorize capital expenditures other than in the
      ordinary and usual course of business; or (K) implement or adopt any
      change in its accounting principles, practices or methods other than as
      may be required by generally accepted accounting principles; or (L) fail
      to maintain its loan and lease loss reserve at equal to or exceeding the
      greater of 4.0% of total loans or $10,000,000. The limitations contained
      in this Section 3.1(b) shall also be deemed to constitute limitations as
      to the making of any commitment with respect to any of the matters set
      forth in this Section 3.1(b).

            (v) That North Country and its Subsidiaries shall not: (A) grant any
      general increase in compensation or benefits to its employees or officers
      or pay any bonuses to its employees or officers except in accordance with
      policies in effect on the date hereof; (B) enter into, extend, renew,
      modify, amend or otherwise change any employment or severance agreements
      with any of its directors, officers or employees except as consistent with
      past practice; (C) grant any increase in fees or other increases in
      compensation or other benefits to any of its present or former directors
      in such capacity; (D) establish or sponsor any new Employee Plan or
      Benefit Arrangement or effect any material change in its Employee Plans or
      Benefit Arrangements (unless such change is required by applicable law or,
      in the opinion of its counsel, is necessary to maintain continued
      qualification of any tax-qualified plan that provides for retirement
      benefits).

      (c) North Country agrees to use its Best Efforts to cause to be listed on
the NASDAQ SmallCap Market, subject to official notice of issuance, the North
Country Shares to be issued to the Investors as contemplated in this Agreement.

      (d) Each of the covenants of North Country contained in Section 3 of the
Placement Agent Agreement are hereby incorporated by reference herein.

      (e) North Country shall take all required action so that it shall continue
to be qualified to use Form S-3 for the registration statement to be filed by it
as contemplated by the Registration Rights Agreement.

3.2 Covenants as to Regulatory Filings and Legal Conditions.

<PAGE>

      (a) Each of the parties agrees to use its Best Efforts and to fully
cooperate with the other in seeking all required Regulatory Approvals of this
Agreement and the transactions contemplated by this Agreement (including the
issuance and sale of the North Country Shares and a new branch in Oakland
County, Michigan) and, without limiting the generality of the foregoing, to
furnish to the other upon request all information as may be required for
submission in connection with any required Regulatory Filings. Each party agrees
to execute and deliver all required consents to all Regulatory Filings. Counsel
for NCFC Recapitalization shall take the lead in the preparation of any
Regulatory Filings with the FRB, FDIC and OFIS relating to the transactions
contemplated by this Agreement. The Definitive Subscription Documents will
contain similar covenants of the Investors executing the documents. North
Country shall, as promptly as practicable under the circumstances, deliver to
NCFC Recapitalization copies of all Regulatory Filings and other correspondence
and documents submitted or received from any Regulatory Authority relating to
the transactions contemplated by this Agreement or the Order and a written
summary of any conversations or meetings with any Regulatory Authorities
relating to the transactions contemplated by this Agreement or the Order (to the
extent those conversations or meetings do not involve participation by a
representative of NCFC Recapitalization).

      (b) Each party shall, and North Country shall cause its Subsidiaries to,
use their Best Efforts (i) to take, or cause to be taken, all actions necessary,
proper or advisable to comply promptly with all legal requirements which may be
imposed on such party or its Subsidiaries with respect to the transactions
contemplated by this Agreement and, subject to the Closing Conditions, to
consummate the transactions contemplated by this Agreement and (ii) to obtain
(and to cooperate with the other party to obtain) any consent, authorization,
order or approval of, or any exemption by, any governmental authority and any
other third party which is required to be obtained by it or any of its
Subsidiaries in connection with the transactions contemplated by this Agreement.

3.3 North Country Disclosure Schedule and Changes.

      (a) North Country is delivering to NCFC Recapitalization the Disclosure
Schedule contemporaneously with the execution and delivery of this Agreement.
Each exception to a representation and warranty made by North County in this
Agreement must be described in reasonable detail in the Disclosure Schedule and
identify the Section of this Agreement to which the disclosure applies. The mere
inclusion of an item in the Disclosure Schedule as an exception to a
representation or warranty shall not be deemed an admission by North Country
that the item represents a material exception or that the item is reasonably
likely to have or result in a Material Adverse Effect on North Country.

      (b) North Country shall give prompt notice to NCFC Recapitalization as
soon as practicable after it has knowledge of (i) the occurrence, or failure to
occur, of any event which would cause North Country's representations or
warranties contained in this Agreement to be incorrect or not complete in any
material respect at any time from the date of this Agreement to the Closing Date
(or if the representation and warranty were given continuously), or (ii) any
failure on its part or on the part of any of its or its Subsidiaries' officers,
directors, employees, representatives or agents to comply with or satisfy in any
material respect any covenant, condition or agreement to be complied with or
satisfied by North Country under this Agreement. NCFC Recapitalization shall be
entitled to exercise any right it may have to terminate this Agreement pursuant
to Section 4.6 of this Agreement notwithstanding any disclosure set forth in any
such notice.

3.4 North Country Shareholder Meeting.

      (a) North Country shall duly call and hold, in accordance with applicable
state law, the Securities Exchange Act and the NASDAQ Rules, a meeting of its
shareholders as soon as reasonably practicable for the purpose of obtaining all
requisite North Country shareholder approvals required in connection with this
Agreement and the transactions contemplated hereby (including the Shareholder
Approval Items). North Country shall, through its Board of Directors, but
subject to its fiduciary obligations as determined by its Board of Directors,
recommend to its shareholders approval of the Shareholder Approval Items (and
such recommendation shall be contained in the Proxy Statement) and use its Best
Efforts to solicit proxies in favor of approval of the Shareholder Approval
Items. In the event that prior to the approval of the Shareholder Approval Items
by the North Country shareholders, the Board of Directors of North Country
determines in good faith by resolution duly adopted that a Recommendation Event
is required in order for the directors to comply with their respective fiduciary
duties under Michigan law, the Board of Directors of North Country may undertake
the Recommendation Event.

3.5 Offering Documents and Proxy Materials.

<PAGE>

      (a) For purposes of the Offering, North Country shall use its Best Efforts
to prepare as soon as possible and make available to the Placement Agents and
NCFC Recapitalization the Offering Documents. The Offering Documents shall be in
accordance with the terms and conditions of this Agreement and shall be in form
and content to satisfy all applicable laws and regulations and the Order. The
Offering Documents shall be submitted to the FDIC and OFIS as required by the
Order prior to their dissemination by North Country.

      (b) For the purposes of soliciting proxies in connection with the North
Country shareholder meeting pursuant to Section 3.4, North Country shall use its
Best Efforts prepare and cause to be filed with the SEC a Schedule 14A including
a preliminary proxy statement and associated materials meeting the requirements
of the Securities Exchange Act as soon as possible and to prepare and cause to
be filed with the SEC an amended Schedule 14A including a definitive proxy
statement and associated materials meeting the requirements of the Securities
Exchange Act as soon thereafter as practicable (the definitive proxy statement
in the form mailed to North Country shareholders, together with all and any
amendments and supplements thereto, is referred to as the "Proxy Statement").
The Proxy Statement, the related solicitation materials, and the solicitation by
North Country of proxies for use at the North Country shareholder meeting
referred to in Section 3.4 shall fully comply with all applicable requirements
of state laws, the Securities Exchange Act and the NASDAQ Rules.

3.6 Exclusivity.

      (a) In consideration of the undertakings and agreements contained herein,
North Country agrees that, so long as this Agreement is in effect, neither North
Country nor any of its Subsidiaries nor any of the respective officers and
directors of North Country or any of its Subsidiaries shall, and North Country
will cause its employees, agents and representatives (including any investment
banker, attorney, advisor or accountant retained by North Country or any of its
subsidiaries) not to, initiate or solicit, directly or indirectly, any inquiries
or the making of any Acquisition Proposal, or engage in any negotiations
concerning, or provide any confidential information or data to, or have any
discussions with, any person, entity or group relating to any Acquisition
Proposal, or otherwise facilitate any effort or attempt to make or implement any
Acquisition Proposal, except as contemplated by this Agreement.

      (b) North Country will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any persons, entities or
groups conducted heretofore with respect to any of the foregoing. North Country
shall notify NCFC Recapitalization immediately if any such inquiries or
proposals are received by, any such information is requested from, or any such
negotiations or discussions are sought to be initiated or continued with North
Country. NCFC Recapitalization acknowledges that North Country has agreements in
place to sell three branch locations. Completion of these branch sale
transactions will not in any way violate the terms of this Section or this
Agreement.

      (c) Nothing contained in this Agreement shall prohibit North Country or
its Board of Directors from making such disclosures to its shareholders as are
required under applicable law or the NASDAQ Rules or from taking and disclosing
to its shareholders a position contemplated by Rule 14e-2(a) promulgated under
the Exchange Act. Nothing contained in this Agreement shall prohibit the Board
of Directors of North Country from either furnishing information to, or entering
into discussions or negotiations with, any person, entity or group regarding any
Acquisition Proposal, approving and recommending an Acquisition Proposal from
any person, entity or group or being involved in a North Country Recommendation
Event, if the Board of Directors of North Country determines in good faith that
such action is appropriate in furtherance of the best interests of its
shareholders. In connection with any such determination, (i) North Country shall
direct its officers and other appropriate personnel to cooperate with and be
reasonably available to consult with any such person, entity or group, (ii)
North Country shall disclose to NCFC Recapitalization that it is furnishing
information to, or entering into discussions or negotiations with, such person,
entity or group, which disclosure shall describe the terms thereof (but need not
identify the person, entity or group making the offer), (iii) prior to
furnishing such information to such person, entity or group, North Country shall
enter into a written agreement with such person, entity or group which provides
for, among other things, (A) the furnishing to North Country of information
regarding such person, entity or group that is relevant to its ability to
finance and otherwise perform its obligations under its Acquisition Proposal;
(B) the confidentiality of all non-public information furnished to such person,
entity or group by North Country; and (C) procedures reasonably satisfactory to
North Country that are designed to restrict or limit the provision of
information regarding North Country that could be used to the competitive
disadvantage of North Country, or in a manner that would be detrimental to the
interests of its shareholders; (iv) North Country shall not furnish any
non-public information

<PAGE>

regarding NCFC Recapitalization or any of the transactions contemplated hereby;
and (v) North Country shall keep NCFC Recapitalization informed of the status of
any such discussions or negotiations (provided that North Country shall not be
required to disclose to NCFC Recapitalization confidential information
concerning the business or operations of such person, entity or group).

3.7 Publicity. Between the date of this Agreement and the Closing Date, neither
party nor in the case of North Country any of its Subsidiaries shall, without
the prior approval of the other party (which approval shall not be unreasonably
withheld), issue or make, or permit any of its directors, employees, officers or
agents to issue or make, any press release, disclosure or statement to the press
or any third party with respect to the transactions contemplated hereby, except
as required by applicable law, the rules of the National Association of
Securities Dealers, Inc. or the NASDAQ Rules. The parties shall cooperate when
issuing or making any press release, disclosure or statement with respect to the
transactions contemplated by this Agreement.

                           Article 4 Closing Matters.

4.1 Closing. The Closing of the transactions contemplated by this Agreement
shall take place beginning at 10:00 a.m. (local time) on a date not later than
the Closing Deadline and at a place specified by NCFC Recapitalization but not
later than the fifth Business Day after the satisfaction or waiver of the
Closing Conditions.

4.2 Extension of Closing Deadline. At any time prior to the Closing Deadline,
NCFC Recapitalization or North Country may, in its discretion (without any
obligation to do so) extend the Closing Deadline to a date selected by it, in
the event that one or more of the Closing Conditions shall not have been
satisfied, or if additional time is required to determine whether one or more of
the Closing Conditions have been satisfied or to seek waivers by the Investors,
but in no event may either NCFC Recapitalization or North Country extend the
Closing Deadline beyond 11:59 p.m., local time, on December 31, 2004 without the
consent of the other party. The party so extending the Closing Deadline shall
give notice to the other party of any extension of the Closing Deadline as
promptly as practicable after the extension (whether before or after the
previous deadline).

4.3 Closing Conditions. Each Investor's obligation to proceed with the Closing
is subject to the satisfaction on or prior to the Closing Date of all of the
Investors' Closing Conditions, any one or more of which may be waived in writing
in whole or part by the Investors (including by NCFC Recapitalization as
contemplated by Section 7.13). North Country's obligation to proceed with the
Closing is subject to the further satisfaction on or prior to the Closing Date
of all of the North Country Closing Conditions, any one or more of which may be
waived in writing in whole or part by North Country.

4.4 Best Efforts to Satisfy Closing Conditions. The parties shall use their
respective Best Efforts to satisfy or cause to be satisfied the Closing
Conditions within their control.

4.5 Determination of Number of North Country Shares to be Issued to the
Investors at the Closing.

      (a) The number of North Country Shares to be issued to each of the
Investors shall be determined pursuant to the proration and other provisions in
the Definitive Subscription Documents. North Country shall duly issue and
deliver, or cause to be duly issued and delivered, at the Closing, certificates
for the North Country Shares to be issued at the Closing in such denominations
and in such registered names as shall be required by the Definitive Subscription
Documents.

      (b) The following shall be used to determine the total number of North
Country Shares to be issued to the Investors, provided that the number of North
Country Shares to be issued shall not be less than 39,775,195:

      First Step: Add the Net Proceeds of the Offering to the Pre-Closing
                  Adjusted Equity.

      Second Step: Divide the Pre-Closing Adjusted Equity by the result of the
                   First Step.

      Third Step: Divide the Pre-Closing Outstanding Shares by the result of the
                  Second Step. The result of this Third Step is the number of
                  shares of common stock to be outstanding after the Closing.

<PAGE>

      Fourth Step: Subtract the Pre-Closing Outstanding Shares from the result
                   of the Third Step. The greater of 39,775,195 or the result
                   determined in this Fourth Step shall be the total number of
                   North Country Shares to be issued by North Country to the
                   Investors at the Closing.

      (c) Not less than five (5) Business Days prior to the Closing Date, North
Country shall cause the Accounting Firm to prepare (with the participation of
North Country and NCFC Recapitalization) and deliver to North Country and NCFC
Recapitalization a schedule setting forth computations of (i) the Pre-Closing
Adjusted Equity and (ii) the number of North County Shares to be issued to the
Investors pursuant to this Agreement (the "Closing Schedule") and the Accounting
Firms certification that the Closing Schedule and such computations were
prepared in accordance with this Agreement. The records necessary to prepare the
Closing Schedule and the computations therein shall be furnished by North
Country to the Accounting Firm and to NCFC Recapitalization.

      (d) NCFC Recapitalization (together with its advisors) shall have the
right during the succeeding five (5) Business Day period, or such longer period
as NCFC shall reasonably require by notice to North Country (the "Review
Period"), to examine the Closing Schedule, and all information reasonably
related thereto that may be requested by NCFC Recapitalization. Seller shall
provide, and cause the Accounting Firm to provide, to NCFC Recapitalization and
its advisors reasonable access to the work papers used to prepare the Closing
Schedule. If NCFC Recapitalization disagrees with any of the computations on the
Closing Schedule, it shall notify North Country (such notice, a "Notice of
Disagreement") on or before the last day of the Review Period, setting forth a
description of NCFC Recapitalization's objections.

      (e) In the event that NCFC Recapitalization does not provide a Notice of
Disagreement on or before the last day of the Review Period or NCFC
Recapitalization affirmatively notifies North Country that it does not disagree
with the Closing Schedule, the Closing Schedule, and the computations set forth
therein, shall be final, binding and conclusive for all purposes hereunder. In
the event that a Notice of Disagreement is provided by NCFC Recapitalization,
NCFC Recapitalization and North Country shall use Best Efforts for a period of
five (5) Business Days (or such longer period as they may mutually agree) to
resolve any disagreements with respect to the Closing Schedule. The objections
set forth in the Notice of Disagreement that are resolved by NCFC
Recapitalization and North Country in accordance with this Section are referred
to herein as the "Resolved Objections" and the Closing Schedule shall be
adjusted to reflect any Resolved Objections.

      (f) If, at the end of such five (5) Business Day period (or longer agreed
upon period), NCFC Recapitalization and North Country are unable to resolve all
of the objections set forth in any Notice of Disagreement, NCFC Recapitalization
may elect to either (i) terminate this Agreement pursuant to Section 4.6(h) or
(ii) to proceed with the Closing, and in that case the number of North Country
Shares to be issued at the Closing shall be based on the Closing Schedule as
adjusted to reflect the Resolved Objections and the remaining disagreements as
to the Closing Schedule shall be resolved by the Second Accounting Firm as
provided in Section 4.5(h) below.

      (g) In the event that NCFC Recapitalization shall elect to proceed with
the Closing as provided in Section 4.5(f), NCFC Recapitalization and North
Country shall

<PAGE>

jointly engage the Second Accounting Firm within ten (10) Business Days after
the Closing to resolve any remaining objections in the Notice of Disagreement.
NCFC Recapitalization and North Country shall submit the remaining objections in
writing to the Second Accounting Firm within thirty (30) days after the Second
Accounting Firm's engagement. The Second Accounting Firm, acting as experts and
not as arbitrators, shall review the objections set forth in the Notice of
Disagreement that are not Resolved Objections (collectively, the "Differences").
The Second Accounting Firm shall determine, within 45 days of the date on which
such dispute is referred based on the requirements set forth in this Section
4.5, and only with respect to the Differences submitted to the Second Accounting
Firm, whether and to what extent the Closing Schedule was prepared in accordance
with this Agreement and what adjustments (if any) the Closing Schedule requires
in order for it to comply with this Agreement. North Country shall pay the fees
and expenses of the Second Accounting Firm. The accepted Closing Schedule
pursuant to the first sentence of Section 4.5(e) or the finally determined
Closing Schedule pursuant to Section 4.5(g) is referred to as the "Final Closing
Schedule".

      (h) In the event that the finally determined Final Closing Schedule
pursuant to Section 4.5(h), shows that additional North Country Shares are to be
issued to the Investors, North Country shall duly issue and deliver, or cause to
be duly issued and delivered, within five (5) Business Days after receipt of the
Final Closing Schedule, certificates for the additional North Country Shares in
such denominations and in such registered names as shall be required by the
Definitive Subscriptions Documents.

4.6 Termination. This Agreement may be terminated before the Closing Date as
follows:

      (a) By written agreement of NCFC Recapitalization and North Country.

      (b) By NCFC Recapitalization or any Investor (but in the case of an
Investor as to that Investor only), by written notice to North Country in the
event that, through no fault of NCFC Recapitalization, one or more of the
Investors' Closing Conditions is not satisfied prior to the Closing Deadline or
satisfaction of such condition is or becomes impossible.

      (c) By North Country by notice to NCFC Recapitalization, in the event
that, through no fault of North Country, one or more of the North Country
Closing Conditions is not satisfied prior to the Closing Deadline or
satisfaction of such condition is or becomes impossible.

      (d) By NCFC Recapitalization by notice to North Country, if North Country
shall have authorized, recommended or approved, or if North Country shall have
entered into, an agreement or letter of intent with any person, entity or group,
other than NCFC Recapitalization, to effect an Acquisition Proposal.

      (e) By NCFC Recapitalization by notice to North Country, after the
occurrence of a Recommendation Event or Acquisition Event.

      (f) By North Country by notice to NCFC Recapitalization, after the
occurrence of (i) a Recommendation Event or (ii) an Acquisition Event (provided
North Country has not breached Section 3.6).

<PAGE>

      (g) By either NCFC Recapitalization or North Country by notice to the
other, if any approval of the shareholders of North Country as to any of the
Shareholder Approval Items shall not have been obtained by reason of the failure
to obtain the required vote at a duly held meeting of shareholders or at any
adjournment or postponement thereof.

      (h) At any time prior to the Closing, by North Country or NCFC
Recapitalization, in the event that the Closing has not occurred by the Closing
Deadline, except to the extent that the failure of the Closing to occur arises
out of or results from the knowing action or inaction of the party seeking to
terminate pursuant to this Section 4.6(h).

      (i) By NCFC Recapitalization by notice to North Country pursuant to
Section 4.5(g).

4.7 Effect of Termination. In the event that this Agreement is terminated prior
to the Closing pursuant to Section 4.6, this Agreement shall become null and
void and of no further force and effect and no party shall have any liability to
another party except only for such party's willful breach of this Agreement and
except that Section 4.8 and Article 8 shall survive the termination.

4.8 Liquidated Damages; Termination Fee.

      (a) Notwithstanding anything to the contrary contained in this Agreement,
in the event that any of the following events or circumstances shall occur,
North Country shall, within ten (10) days after notice of the occurrence thereof
by NCFC Recapitalization, pay to NCFC Recapitalization the sum equal to
$1,500,000 plus reimbursement of the Specified Expenses not to exceed $250,000,
if not previously paid pursuant to Section 4.8(b), (which the parties agree and
stipulate as reasonable and full liquidated damages and reasonable compensation
for the involvement of NCFC Recapitalization in the transactions contemplated in
this Agreement, is not a penalty or forfeiture, and will not affect the
provisions of Section 4.7): (i) NCFC Recapitalization shall terminate this
Agreement pursuant to Section 4.6(d) or 4.6(e); (ii) North Country shall
terminate this Agreement pursuant to Section 4.6(f); (iii) North Country fails
to call and hold the meeting of its shareholders as contemplated in Section 3.4
of this Agreement; or (iv) any of the Investors' Conditions shall not have been
satisfied as of the date of any termination of this Agreement pursuant to
Section 4.6 and there shall occur any Acquisition Event (whether or not pending
on the effective date of termination of this Agreement) within twelve (12)
months after the effective date of any such termination.

      (b) Notwithstanding anything to the contrary contained in this Agreement,
in the event that any of the Investors' Conditions set forth in Section 2, 3, 7,
10, 13, 14, 15 or 20 of Part I of Schedule 3 shall not have been satisfied as of
the date of any termination of this Agreement pursuant to Section 4.6, North
Country shall, within ten (10) days after the effective date of any such
termination, pay to NCFC Recapitalization an amount equal to the Specified
Expenses not to exceed $250,000 (which the parties agree and stipulate as
reasonable and full liquidated damages and reasonable compensation for the
involvement of NCFC Recapitalization in the transactions contemplated in this
agreement, is not a penalty or forfeiture, and will not affect the provisions of
Section 4.7 or 4.8(a)).

      (c) Upon the making and receipt of the payment(s) under this Section 4.8,
North Country shall have no further obligation of any kind under this Agreement
and neither NCFC Recapitalization nor any Investor shall have any further
obligation of any kind under this Agreement, except in each case as provided
under this Section 4.8 or Section 4.7.

                    Article 5 Representations and Warranties

5.1 Representations and Warranties of North Country. North Country represents
and warrants to NCFC Recapitalization and each of the Investors that the
statements contained in this Section 5.1 are correct and complete as of the date
of this Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date was substituted for the date of
this Agreement throughout this Section), except (i) as set forth in the North
Country Disclosure Schedule and (ii) as to statements made on the Closing Date
only, for any changes to the North Country Disclosure Schedule in accordance
with Section 3.3(b).

<PAGE>

      (a) Organization and Good Standing. North Country is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Michigan; the Bank is a banking corporation organized, validly existing and in
good standing under the laws of the State of Michigan; North Country Capital
Trust is a business trust duly organized, validly existing and in good standing
under the laws of the State of Delaware; and each of North Country's other
Subsidiaries are corporations duly organized, validly existing and in good
standing under the laws of the State of Michigan. Each of North Country and each
of its Subsidiaries has full power and authority to own its assets and
properties and carry on its business as now being conducted. Each of North
Country and each of its Subsidiaries is duly licensed and qualified to do
business in each jurisdiction in which the nature of the business conducted by
it or the character or location of properties and assets owned or leased by it
makes such licensing or qualification necessary. North Country is duly
registered as a bank holding company registered under the Bank Holding Company
Act of 1956, as amended. All eligible accounts of each of its Subsidiaries that
is a depositary institution are insured by the FDIC to the maximum extent
permitted under applicable law.

      (b) Power; Due Authorization; Enforceability.

            (i) North Country has all requisite capacity, power and authority to
      execute and deliver this Agreement and the Definitive Subscription
      Documents and to perform and comply with all of the terms, covenants and
      conditions to be performed and complied with by North Country in this
      Agreement and the Definitive Subscription Documents.

            (ii) The execution, delivery and performance by North Country of
      this Agreement have been, and when the Definitive Subscription Documents
      are executed and delivered by North Country they will have been, duly
      authorized by all necessary actions on the part of North Country
      (including approval by North Country's Board of Directors). The Board of
      Directors of North Country has duly approved and authorized the this
      Agreement and each of the transactions contemplated by this Agreement, and
      has determined that this Agreement and the transactions contemplated by
      this Agreement are in the best interests of North Country and its
      Shareholders. This Agreement has been duly executed and delivered by North
      Country and constitutes, and when the Definitive Subscription Agreement
      have been executed and delivered by North Country they will have been duly
      executed and delivered and will constitute, North Country's legal, valid
      and binding obligation, enforceable against it in accordance with their
      respective terms, except as enforceability may be limited by bankruptcy,
      insolvency, moratorium, or other similar laws affecting the enforcement of
      creditors' rights generally and by general principles of equity.

      (c) Consents and Approvals. No third Person or governmental authorization,
consent, waiver, approval or license, nor any exemption of, or filing or
registration with, or expiration of any waiting period of, any court or
governmental agency of any jurisdiction is or will be necessary in connection
with the execution, delivery or performance by North Country, except such
authorizations, consents, waivers, approvals, licenses, exemptions, filings or
registrations as have been obtained or made and waiting periods as have expired
and except as contemplated in Part II of Schedule 3.

<PAGE>

      (d) No Conflicts or Violations. The execution, delivery and performance by
North Country of this Agreement do not and will not, and the execution, delivery
and performance by North Country of the Definitive Subscription Documents will
not: (i) conflict with or violate any provision of the Articles of Incorporation
or Bylaws of North Country or any of its Subsidiaries; (ii) violate any
provision of any law, statute, regulation, order or decree applicable to North
Country or any of its Subsidiaries; (iii) violate the Order; (iv) conflict with,
violate, result in a breach of, constitute a default under (without regard to
requirements of notice, lapse of time or any combination thereof), accelerate or
permit the acceleration of the performance required by, cause any "change in
control" or similar payment to be made under, any contract, agreement or
instrument to which North Country or any of its Subsidiaries is party or by
which North Country or any of its Subsidiaries or the assets or properties owned
or leased by any of them are bound or affected; or (iv) result in the creation
or imposition of any encumbrance against or upon any of the assets of North
Country or any of its Subsidiaries.

      (e) The Order. Except as set forth in Section 5.1(e) of the Disclosure
Schedule, North Country, the Bank, their Boards of Directors and executive
officers have fully complied with all provisions of the Order. The Order has not
been amended or modified.

      (f) No Litigation. There are no claims, lawsuits, arbitrations or
governmental investigations pending, or to the best knowledge of North Country,
threatened against North Country or any of its Subsidiaries which would
reasonably be expected to result in an order or decree restraining, enjoining or
otherwise prohibiting or making illegal the consummation of the transactions
contemplated by this Agreement.

      (g) Authorized and Outstanding Capital Stock. The authorized capital stock
of North Country consists of 18,500,000 shares, divided into two classes. One
class consists of 500,000 shares of preferred stock, none of which is issued or
outstanding, and the other class consists of 18,000,000 shares of common stock.
As of the date of this Agreement, 7,019,152 shares of common stock of North
Country are issued and outstanding and no shares of common stock of North
Country were held in treasury. All of the issued and outstanding shares of
common stock of North Country have been duly authorized and validly issued and
are fully paid, nonassessable and free of preemptive rights with no personal
liability attaching to the ownership thereof. Except pursuant to the terms of
this Agreement, and except for the North Country Stock Option Plans and the
North Country Stock Options, North Country does not have and is not bound by any
outstanding subscriptions, options, warrants, calls, commitments or agreements
of any character calling for the purchase or issuance of any shares of common
stock of North Country or any other equity securities of North Country or any
securities representing the right to purchase or otherwise receive any shares of
common stock of North Country or any other equity securities of North Country.
As of the date of this Agreement, no shares of common stock of North Country
were subject to outstanding and unexercised options, warrants, or other rights
to purchase shares of common stock of North Country, except for 535,732 shares
reserved for issuance upon the exercise or vesting of North Country Stock
Options issued pursuant to the North Country Stock Option Plans. Section 5.1(g)
or the Disclosure Schedule contains a true and correct list of all outstanding
North Country Stock Options, the holder of the options, the number of shares of
common stock of North Country subject to the options, the vesting schedule of
the options, and the exercise price per share of the options. Neither the number
of the shares of North Country covered by any outstanding North Country Options,
the exercise price of any outstanding North Country Options, nor any other term
or provision of any North Country Options will be altered or in any way affected
by the consummation of the transactions contemplated by this Agreement. Since
June 30, 2004, North Country has not issued any shares of common stock of North
Country or other equity securities of North Country, or any securities
convertible into or exercisable for any North Country Shares or other equity
securities of North Country, other than as contemplated by this Agreement or
pursuant to the exercise of stock options issued under the North Country Stock
Option Plans granted prior to the date of this Agreement. The

<PAGE>

outstanding shares of common stock of North Country are the only securities
issued by North Country that are entitled to vote on the Shareholder Approval
Items.

      (h) Preferred Share Purchase Rights. The Board of Directors has taken all
required action so that (i) neither a "Share Acquisition Date" nor a
"Distribution Date" (as those terms are defined in the Rights Agreement) shall
occur as a result of this Agreement or any of the transactions contemplated by
this Agreement, (ii) none of NCFC Recapitalization, any Investor or any
Affiliate or Associate (as those terms are defined in the Rights Agreement) of
any of them (or any group of any of them), shall be or become an "Acquiring
Person" (as that term is defined in the Rights Agreement) as a result of this
Agreement, any of the transactions contemplated by this Agreement, or any action
taken by any of them (or any group of any of them) under or in connection with
this Agreement or any of the transactions contemplated hereby, in each case
regardless of the number of shares of common stock of North Country
"Beneficially Owned" (as that term is defined in the Rights Agreement) by any of
them or any group of any of them, and (iii) all outstanding Rights and the
Rights Agreement shall expire and be terminated immediately prior to the Closing
without any payment. No Person (as that term is defined in the Rights Agreement)
has become an Acquiring Person and no Share Acquisition Date or Distribution
Date has occurred.

      (i) SEC Reports and Financial Statements; Regulatory Filings.

            (i) North Country has filed all forms, reports and documents
      required to be filed by it with the SEC since January 1, 2001. Section
      5.1(i) of the Disclosure Schedule lists, and North Country has made
      available to NCFC Recapitalization, copies in the form filed with the SEC
      of (A) North Country's Annual Reports on Form 10-K for each fiscal year of
      North Country since December 31, 2000, (B) its Quarterly Reports on Form
      10-Q for each of the first three fiscal quarters in each of the fiscal
      years of North Country since December 31, 2000, (C) all proxy statements
      relating to North Country's meetings of shareholders (whether annual or
      special) held, and all information statements relating to shareholder
      consents, since December 31, 2000, (D) all certifications and statements
      required by (y) Rule 13a-14 or 15d-14 under the Exchange Act or (z) 18
      U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002) with
      respect to any report referred to in clause (A) or (B) of this sentence,
      (E) all other forms, reports and registration statements (other than
      preliminary materials if the corresponding definitive materials have been
      provided to NCFC Recapitalization pursuant to this Section 5.1(h)) filed
      by North Country with the SEC since December 31, 2000 (the items described
      in (A), (B), (C), (D) and (E) of this sentence, together with any and all
      amendments thereto, are, collectively, the "SEC Reports"), and (F) all
      comment letters received by North Country from the Staff of the SEC since
      December 31, 2000 and all responses to such comment letters.

            (ii) The SEC Reports (A) were prepared in all material respects in
      accordance with the requirements of the Securities Act and the Exchange
      Act, as the case may be, and (B) did not at the time they were filed with
      the SEC, or if thereafter amended, at the time of such amendment, contain
      any untrue statement of

<PAGE>

      a material fact or omit to state a material fact required to be stated
      therein or necessary in order to make the statements made therein, in the
      light of the circumstances under which they were made, not misleading. No
      Subsidiary of North Country is or has been required to file any form,
      report, registration statement or other document with the SEC. To the
      Knowledge of North Country, each director and executive officer of North
      Country has filed with the SEC on a timely basis all statements required
      by Section 16(a) of the Securities Exchange Act since December 31, 2000,
      except as otherwise disclosed in a SEC Report. As used in this Section
      5.1(i), the term "file" shall be broadly construed to include any manner
      in which a document or information is furnished, supplied or otherwise
      made available to the SEC.

            (iii) North Country has established and maintains disclosure
      controls and procedures (as such term is defined in Rule 13a-15(e) under
      the Exchange Act). Such disclosure controls and procedures: (A) are
      designed to ensure that material information relating to North Country and
      its Subsidiaries is made known to North Country's chief executive officer
      and its chief financial officer by others within those entities,
      particularly during the periods in which North Country's reports and
      filings under the Securities Exchange Act are being prepared, (B) have
      been evaluated for effectiveness as of the end of the most recent annual
      period reported to the SEC, and (C) are effective to perform the functions
      for which they were established. Neither the auditors of North Country nor
      the Audit Committee of the Board of Directors of North Country has been
      advised of: (x) any significant deficiencies or material weaknesses in the
      design or operation of the internal controls over financial reporting (as
      such term is defined in Rule 13a-15(f) under the Securities Exchange Act)
      of North Country that have materially affected North Country's internal
      control over financial reporting; or (y) any fraud, whether or not
      material, that involves management or other employees who have a role in
      the internal controls over financial reporting of North Country.

            (iv) Since July 31, 2002, each SEC Report was accompanied by the
      certifications of North Country's chief executive officer and chief
      financial officer to the extent required under Sections 302 and 906 of the
      Sarbanes-Oxley Act of 2002, and North Country hereby reaffirms, represents
      and warrants to NCFC Recapitalization and each Investor, the matters and
      statements made in such certifications.

            (v) The financial statements of North Country and its Subsidiaries
      included in the SEC Reports (including the related notes) complied as to
      form, as of their respective dates of filing with the SEC (or if amended,
      as of the date of such amendment), in all material respects with
      applicable accounting requirements and the published rules and regulations
      of the SEC with respect thereto (including Regulation S-X), were prepared
      in accordance with generally accepted accounting principles in the United
      States applied on a consistent basis ("GAAP") during the periods and at
      the dates involved (except as may be indicated in the notes thereto and
      except, in the case of unaudited statements, to the extent permitted by

<PAGE>

      Regulation S-X for Quarterly Reports on Form 10-Q), and fairly present the
      consolidated financial condition of North Country and its Subsidiaries at
      the dates thereof and the consolidated results of operations and cash
      flows for the periods then ended.

            (vi) To the best knowledge of North Country, Plante & Moran, PLLC,
      which has expressed its opinion with respect to the financial statements
      of North Country and its Subsidiaries included in SEC Reports (including
      the related notes), is and has been throughout the periods covered by such
      financial statements (A) "independent" with respect to North Country
      within the meaning of Regulation S-X, and is (B) a registered public
      accounting firm as defined in Section 2(a)(12) of the Sarbanes-Oxley Act
      of 2002 and (C) in compliance with subsections (g) through (l) of Section
      10A of the Securities Exchange Act and the Public Company Accounting
      Oversight Board. Section 5.1(i) of the Disclosure Schedule lists all
      non-audit services performed by Plante & Moran, PLLC for North Country and
      each Subsidiary since December 31, 2000.

            (vii) North Country has made available to NCFC Recapitalization
      copies of the documentation creating or governing all securitization
      transactions and "off-balance sheet arrangements" (as defined in Item
      303(c) of Regulation S-K of the SEC) effected by NCFC or its Subsidiaries
      since December 31, 2000.

            (viii) North Country and each Subsidiary maintains proper and
      adequate internal controls over financial reporting which provide
      reasonable assurance that (i) transactions are executed in accordance with
      management's general or specific authorization; (ii) transactions are
      recorded as necessary to permit preparation of its financial statements in
      accordance with GAAP and to maintain accountability for its assets; and
      (iii) access to material assets is permitted only in accordance with
      management's general or specific authorization.

            (ix) Since January 1, 2001, North Country and its Subsidiaries,
      including the Bank, have filed all reports, registrations and financial
      and other statements, together with any amendments required to be made
      with respect thereto, that were required to be filed with any Regulatory
      Authority (collectively, the "Filings"). North Country has provided NCFC
      Recapitalization with copies of all Filings, together with copies of all
      orders or other administrative actions taken in connection with such
      Filings. As of their respective dates, each of the Filings (i) was true
      and complete in all material respects (or was amended so as to be so
      promptly following discovery of any discrepancy), and (ii) complied in all
      material respects with the statutes, rules and regulations enforced or
      promulgated by the Regulatory Authority with which it was filed. No such
      Filing contains any untrue statement of a material fact or omitted to
      state a material fact requires to be stated therein or necessary to make
      the statements therein, in light of the circumstances under which they
      were made, not misleading. Any financial statement contained in any Filing
      that was intended to present the financial position of the entity or
      entities to which it related fairly presented such financial position in
      accordance with generally accepted

<PAGE>

      accounting principles or applicable banking regulations consistently
      applied, except as stated therein.

            (x) North Country is qualified to use Form S-3 for the registration
      statement to be filed by it as contemplated by the Registration Rights
      Agreement.

      (j) Compliance with Laws and NASDAQ Rules.

            (i) Except as set forth in Section 5.1(j) of the Disclosure
      Schedule, North Country and each of its Subsidiaries are in compliance in
      all material respects with all laws, regulations, ordinances, rules,
      judgments, orders or decrees applicable to their respective operations or
      businesses, including the Equal Credit Opportunity Act, the Fair Housing
      Act, the Community Reinvestment Act, the Home Owners' Disclosure Act and
      all other applicable fair lending laws or other laws relating to
      discrimination. Except as set forth in Section 5.1(j) of the Disclosure
      Schedule, neither North Country nor any of its Subsidiaries has received
      notice from any federal, state or local government or governmental or
      regulatory agency or body of any material violation of, and does not know
      of any material violations of, any of the above.

            (ii) North Country and each of its Subsidiaries have all permits,
      licenses, certificates of authority, franchises, orders and approvals of,
      and have made all filings, applications and registrations with, all
      federal, state, local and foreign government or governmental or regulatory
      agency or body that are required in order to permit them to carry on their
      respective businesses as they are presently being conducted.

            (iii) Other than the Order, North Country and each of its
      Subsidiaries have not received any notification or communication from any
      government or governmental or regulatory agency or body or the staff
      thereof, since January 1, 2001 or, whether or not received since that
      date, that remain outstanding and not fully resolved (A) asserting that it
      or any of its Subsidiaries is not in compliance with any of the statutes,
      regulations or ordinances that such government or governmental or
      regulatory agency or body administers or enforces; (B) threatening to
      revoke any license, franchise, permit or authorization; or (C) threatening
      or contemplating any enforcement action by or supervisory or other written
      agreement with a state or federal banking regulator, or any revocation or
      limitation of, or action which would have the effect of revoking or
      limiting, the FDIC deposit insurance of any Subsidiary (nor, to the
      knowledge of its executive officers, do any grounds for any of the
      foregoing exist).

            (iv) Other than the Order, neither North Country nor any Subsidiary
      of North Country is subject to any cease-and-desist or other order issued
      by, or is a party to any written agreement, consent agreement or
      memorandum of understanding currently in effect with, or is a party to any
      commitment letter or similar undertaking currently in effect to, or is
      subject to any order or directive by, or is currently subject to any
      supervisory letter from, or has adopted any board resolutions at the
      request of any Regulatory Authority currently in effect nor has North
      Country or any of its Subsidiaries been advised in writing by any
      Regulatory Authority that it is considering issuing or requesting any of
      the foregoing.

<PAGE>

            (v) There is no pending or, to the best knowledge of North Country,
      threatened (in writing), charge by any Regulatory Authority that North
      Country or any Subsidiary has violated any applicable laws, rules or
      regulations, nor, to the best knowledge of North Country, any pending or
      threatened investigation by any Regulatory Authority with respect to
      possible material violations of any applicable laws, rules or regulations.

            (vi) There are no contracts, real estate leases, loans, guarantees
      or other arrangements or transactions of any nature between North Country
      or any Subsidiary or North Country, on the one hand, and any of their
      respective officers, directors, or affiliates (as such term is defined in
      Rule 405 of the SEC), on the other hand. North Country has not, since July
      30, 2002, extended or maintained credit, arranged for the extension of
      credit, or renewed an extension of credit, in the form of a personal loan
      to or for any director or executive officer (or equivalent thereof) of
      North Country or any Subsidiary or North Country in violation of Section
      13(k)(1) of the Securities Exchange Act. Section 5.1(j)(vi) of the
      Disclosure Schedule identifies each loan or extension of credit currently
      maintained by North Country or any Subsidiary of North Country to which
      the second sentence of Section 13(k)(1) of the Securities Exchange Act
      applies.

            (vii) North Country is in compliance in all material respects with
      the provisions of the Sarbanes-Oxley Act of 2002 and the rules and
      regulations promulgated thereunder that are applicable to it and has
      implemented such programs and has taken reasonable steps to be in a
      position to comply with the requirements, upon effectiveness, of Section
      404 of the Sarbanes-Oxley Act of 2002 and the rules and regulations
      promulgated thereunder.

            (viii) None of North Country, any of the North Country Subsidiaries,
      any of their respective current directors or officers, or, to the best
      knowledge of North Country, any of their respective former officers or
      directors or current or former employees, agents or representatives has,
      since December 31, 2000: (i) used any corporate funds for any illegal
      contributions, gifts, entertainment or other unlawful expenses relating to
      political activity, (ii) used any corporate funds for any direct or
      indirect unlawful payments to any foreign or domestic government officials
      or employees, (iii) violated any provision of the Foreign Corrupt
      Practices Act of 1977, (iv) established or maintained any unlawful or
      unrecorded fund of corporate monies or other assets, (v) made any false or
      fictitious entries on the books and records of North Country or any North
      Country Subsidiary, (vi) made any bribe, rebate, payoff, influence
      payment, kickback or other unlawful payment of any nature, or (vi) made
      any material favor or gift which is not deductible for federal income tax
      purposes. To the best knowledge of North Country: (x) no director or
      officer of North Country or any North Country Subsidiary has engaged in
      any "insider trading" in violation of applicable law with respect to any
      security issued by North Country or any North Country Subsidiary; and (y)
      no director or officer of North Country has made any false certifications
      or statements under (i) the SEC's Order dated June 27, 2002

<PAGE>

      pursuant to Section 21(a)(1) of the Securities Exchange Act (File No.
      4-460), (ii) Rule 13a-14 or 15d-14 under the Securities Exchange Act or
      (iii) 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of
      2002) with respect to any SEC Report.

            (iv) North Country is in compliance with all applicable NASDAQ
      Rules, including all listing and corporate governance requirements.

      (k) North Country Shares to be Issued. When issued in accordance with this
Agreement and the Definitive Subscription Documents, the North Country Shares to
be so issued will be duly authorized, validly issued, fully paid and
nonassessable and not subject to any preemptive rights or Encumbrances.

      (l) Registration Exemptions. The offering and sale of the North Country
Shares to the Investors contemplated by this Agreement will be exempt from the
registration and prospectus delivery requirements of the Securities Act, MUSA
and all other applicable state securities laws.

      (m) Proxy Statement. At the time the Proxy Statement is mailed to the
shareholders of North Country for the solicitation of proxies for the
Shareholder Approval Items and at all times after such mailings up to and
including the times of such approvals, such Proxy Statement (including any
supplements thereto) will (i) comply in all material respects with applicable
provisions of the Exchange Act and (ii) not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements contained therein, in light of the
circumstances under which it is made, not misleading.

      (n) Offering Documents. At the time the Offering Documents are delivered
to prospective Investors and at all times after that time to and including the
Closing Date, such Offering Documents (including any supplements thereto) will
(i) comply in all material respects with applicable provisions of the Securities
Act and applicable securities laws of all other applicable jurisdictions and
(ii) not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements contained therein, in light of the circumstances under which it is
made, not misleading.

      (o) State Takeover Laws; Supermajority Voting Provisions. The Board of
Directors of North Country has duly approved the transactions contemplated by
this Agreement and has adopted irrevocable resolutions approving and exempting
from Section 780 of the MBCA, and any supermajority voting provision contained
in the Articles of Incorporation or Bylaws of North Country, the transactions
contemplated by this Agreement and any existing or future business combination
with NCFC Recapitalization or any Investor, and any of their respective existing
or future Affiliates, and any group of any of them, and taken such further
action as maybe required so that Chapter 7A of the MBCA and any other provisions
of any state "business combination" or "takeover" law applicable to North
Country, or supermajority voting provision contained in the Articles of
Incorporation or Bylaws of North Country, will not apply to this Agreement, any
of the transactions contemplated by this Agreement, or any such existing or
future business combination. The bylaws of North Country have been duly amended
to provide that Chapter 7B of the MBCA does not apply to control share
acquisitions of shares of North Country and, accordingly, Chapter 7B of the MBCA
will not apply to this Agreement or any of the transactions contemplated by this
Agreement.

      (p) No Preemptive or Dissenters' Rights. No shareholder of North Country
has any pre-emptive rights or any right to dissent and obtain payment for his or
her shares of North Country under any agreement or under applicable law with
respect to, or as a result of, the transactions contemplated by this Agreement.

      (q) No Broker Fees. Except for Austin Associates, LLC in accordance with
its amended engagement letter (a copy of which is included in Section 5.1(q) of
the Disclosure Schedule), and except for the Placement Agents in accordance with
their engagement letters (copies of which are also included in Section 5.1(q) of
the Disclosure Schedule) and in this Agreement, no agent, broker, investment
banker, person or firm acting on behalf or under authority of North Country or
any of its Subsidiaries is or will be entitled to any broker's or finder's fee
or any other commission or similar fee directly or indirectly from North Country
or any of its Subsidiaries in connection with the transactions contemplated by
this Agreement,

<PAGE>

      (r) Regulatory Approvals. North Country know of no reason why any of the
Regulatory Approvals should not be obtained without the imposition of any
Burdensome Condition on a timely basis.

      (s) Corporate Affairs.

            (i) North Country has made available to NCFC Recapitalization
      correct and complete copies of the Articles of Incorporation and Bylaws of
      North Country and each of its Subsidiaries (as amended to date). North
      Country has made available to NCFC Recapitalization all of the minute
      books containing the records of the meetings of the shareholders, the
      board of directors and any committee of the board of directors of North
      Country and each Subsidiary since January 1, 2001. The minute books of
      North Country and its Subsidiaries reflect all of the material actions
      taken by each of their respective Boards of Directors (including each
      committee thereof) and shareholders. North Country has made available to
      NCFC Recapitalization all of the stock ledgers of North Country and its
      Subsidiaries.

            (ii) The minute books and the stock ledgers of North Country
      accurately and completely list and describe all issuances, transfers of
      record and cancellations of shares of capital stock of North Country. The
      minute books and stock ledgers of each Subsidiary accurately and
      completely list and describe all issuances, transfers and cancellations of
      shares of capital stock of the Subsidiary.

      (t) Ownership of Subsidiaries. All outstanding shares or ownership
interests of North Country's Subsidiaries are validly issued, fully paid,
nonassessable and owned beneficially and of record by North Country or one of
its Subsidiaries free and clear of any Encumbrance. There are no options,
convertible securities, warrants or other rights (preemptive or otherwise) to
purchase or acquire any capital stock or ownership interests of any of North
Country's Subsidiaries and no contracts to which North Country or any of its
Subsidiaries is subject with respect to the issuance, voting or sale of issued
or unissued shares of the capital stock or ownership interests of any of its
Subsidiaries. Neither North Country nor any of its Subsidiaries owns more than
2% of the capital stock or other equity securities (including securities
convertible or exchangeable into such securities) of or more than 2% of the
aggregate profit participations in any entity other than a Subsidiary or as
otherwise set forth in Section 5.1(t) of the Disclosure Schedule.

      (u) Absence of Changes.

            (i) Since December 31, 2003, except as set forth in Section 5.1(u)
      of the Disclosure Schedule, and except as disclosed in the SEC Reports of
      North Country and Regulatory Filings that were filed prior to the date of
      this Agreement and are identified in Section 5.1(u) of the Disclosure
      Schedule, there has been no Material Adverse Effect. There is no
      occurrence, event or development of any nature existing or, to its best
      knowledge, threatened which may reasonably be expected to have a Material
      Adverse Effect.

            (ii) Except as set forth in North Country's Regulatory Filings filed
      after December 31, 2001 and before the date of this Agreement, since
      December 31, 2001, each of it and its Subsidiaries has owned and operated
      its respective

<PAGE>

      assets, properties and businesses in the ordinary course and consistent
      with past practice.

            (iii) Since December 31, 2003, except as set forth in Section
      5.1(u)(iii) of the Disclosure Schedule, neither North Country nor any of
      its Subsidiaries has (i) except for such actions as are in the ordinary
      course of business consistent with past practice or except as required by
      applicable law, (A) increased the wages, salaries, compensation, pension,
      or other fringe benefits or perquisites payable to any executive officer,
      employee, or director from the amount thereof in effect as of December 31,
      2003, or (B) granted any severance or termination pay or entered into any
      contract to make or grant any severance or termination pay, or (ii)
      suffered any strike, work stoppage, slowdown, or other labor disturbance
      which, in its reasonable judgment, is likely, either individually or in
      the aggregate, to have a Material Adverse Effect, or (iii) taken or
      allowed to occur any of the actions described in Section 3.1(b).

      (v) Litigation and Other Proceedings. Except as set forth in Section
5.1(v) of the Disclosure Schedule, neither North Country nor any of its
Subsidiaries is a defendant in, nor is any of its property subject to, any
pending or, to its best knowledge, threatened claim, action, suit, investigation
or proceeding or subject to any order, judgment or decree, except for the Order.
Except as set forth in Section 5.1(v) of the Disclosure Schedule, there is no
injunction, order, judgment, decree, or regulatory restriction imposed upon it,
any of its Subsidiaries or the assets of it or any of its Subsidiaries which has
had, or might reasonably be expected to have, a Material Adverse Effect on it,
except for the Order.

      (w) Trust Activities. None of North Country's Subsidiaries performs any
personal trust, corporate trust and other fiduciary activities other than as
custodian for individual retirement accounts.

      (x) Employment Arrangements.

            (i) All employees of North Country and its Subsidiaries are
      employees-at-will, may be terminated at any time for any lawful reason or
      no reason and have no entitlement to employment by virtue of any oral or
      written contract, employer policy, or otherwise, except for any employees,
      individually or in the aggregate, the termination of whom without cause
      would not impose any material liability on it or its Subsidiaries or
      require any material payments by it or any of its Subsidiaries. Except as
      set forth in Section 5.1(x) of the Disclosure Schedule, there are no
      agreements, plans or other arrangements with respect to employment,
      severance or other benefits with any current or former directors, officers
      or employees of North Country or any of its Subsidiaries which may not be
      terminated without penalty or expense (including any augmentation or
      acceleration of benefits) on 30 days' or less notice to any such person.
      Except as set forth in Section 5.1(x) of the Disclosure Schedule, no
      payments and benefits (including any augmentation or acceleration of
      benefits) to current or former directors, officers or employees of North
      Country or any of its Subsidiaries resulting from the transactions
      contemplated hereby or the termination of such person's service or
      employment within two years after the Closing Date will cause the
      imposition of excise taxes under Section 4999 of the Code or the
      disallowance of a deduction to North Country or any of its Subsidiaries
      pursuant to Section 162, Section 280G, or any other section of the Code;
      and (iv) neither the execution and delivery of this Agreement nor the
      consummation of the

<PAGE>

      transactions contemplated hereby will (A) constitute a stated "triggering
      event" under any "Employee Plan" (as defined in Section 5.1(y) below) or
      "Benefit Arrangement" (as defined in Section 5.1(y) below) of North
      Country or any of its Subsidiaries that will result in any material
      payment (including severance, unemployment compensation, golden parachute
      or otherwise) becoming due to any director, officer, shareholder, or
      employee of North Country or any of its Subsidiaries, or any dependent or
      affiliate of any of the foregoing, from North Country or any of its
      Subsidiaries under any Employee Plan or Benefit Arrangement of North
      Country or any of its Subsidiaries or otherwise, (B) materially increase
      any benefits otherwise payable under any Employee Plan or Benefit
      Arrangement of North Country or any of its Subsidiaries or (C) result in
      any acceleration of the time of payment or vesting of any such benefits to
      any material extent.

            (ii) Neither North Country nor any of its Subsidiaries is a party to
      any collective bargaining agreement or labor union contract. To the best
      knowledge of North Country, (i) no grievance procedure, arbitration
      proceeding or other labor controversy is pending against it or any of its
      Subsidiaries under any collective bargaining agreement or otherwise, (ii)
      North Country and each of its Subsidiaries has complied in all material
      respects with all laws relating to the employment of labor, including any
      provision thereof relating to wages, hours, equal employment, safety,
      collective bargaining and the payment of social security and similar taxes
      and neither North Country nor any of its Subsidiaries is liable for any
      arrears of wages or any taxes or penalties for failure to comply with any
      of the foregoing, and (iii) there is no unfair labor practice or similar
      complaint against North Country or any of its Subsidiaries pending before
      the National Labor Relations Board or similar authority, or any strike,
      dispute, slowdown, work stoppage or lockout pending or threatened against
      North Country or any of its Subsidiaries or any complaint pending before
      the Equal Employment Opportunity Commission or any comparable federal,
      state or local fair employment practices agency and none has existed
      during the past three years that was not dismissed without liability on
      the part of North Country or any of its Subsidiaries.

(y) Employee Benefits.

            (i) None of North Country, or any of its Subsidiaries, or any trade
      or business, whether or not incorporated, required to be treated as a
      "single employer" (within the meaning of Section 4001 of the Employment
      Retirement Income Security Act of 1974 ("ERISA")) with it under Section
      414(b) or (c) of the Code (an "ERISA Affiliate"), maintains any funded
      deferred compensation plans (including profit sharing, pension, retirement
      savings or stock bonus plans), unfunded deferred compensation arrangements
      or employee benefit plans as defined in Section 3(3) of ERISA, other than
      any plans ("Employee Plans") set forth in Section 5.1(y) of the Disclosure
      Schedule (true and correct copies of which it has delivered to NCFC
      Recapitalization). None of the Employee Plans of North Country or any of
      its Subsidiaries is, and none of North Country, or any

<PAGE>

      of its Subsidiaries, or any ERISA Affiliate has ever sponsored,
      participated in, or contributed to, a "multi-employer plan" as defined in
      Section 3(37) of ERISA, or a "multiple employer plan" as covered in
      Section 413(c) of the Code or any plan which is subject to Title IV of
      ERISA or Section 412 of the Code. Neither North Country nor any of its
      Subsidiaries has incurred or reasonably expects to incur any liability to
      the Pension Benefit Guaranty Corporation except for required premium
      payments which, to the extent due and payable, have been paid. The
      Employee Plans intended to be qualified under Section 401(a) of the Code
      are so qualified, and it is not aware of any fact which would adversely
      affect the qualified status of such plans. Except as set forth in Section
      5.1(y) of the Disclosure Schedule, neither North Country nor any of its
      Subsidiaries (a) provides health, medical, death or survivor benefits to
      any former employee or beneficiary thereof or (b) maintains any form of
      current (exclusive of base salary and base wages) or deferred
      compensation, bonus, stock option, stock appreciation right, benefit,
      severance pay, retirement, employee stock ownership, incentive, group or
      individual health insurance, welfare or similar plan or arrangement for
      the benefit of any single or class of directors, officers or employees,
      whether active or retired (collectively "Benefit Arrangements"). There are
      no restrictions on the rights of North Country or any of its Subsidiaries
      or any ERISA Affiliate to amend or terminate any of the Employee Plans or
      Benefit Arrangements without incurring any liability thereunder except for
      any such restrictions described in Section 5.1(y)(i) of the Disclosure
      Schedule.

            (ii) With respect to all Employee Plans and Benefit Arrangements,
      North Country and each of its Subsidiaries are in substantial compliance
      with the requirements prescribed by any and all statutes, governmental or
      court orders or rules or regulations currently in effect, including but
      not limited to ERISA and the Code, applicable to such Employee Plans or
      Benefit Arrangements. No condition exists that could constitute grounds
      for the termination of any Employee Plan under Section 4042 of ERISA; no
      "prohibited transaction," as defined in Section 406 of ERISA and Section
      4975 of the Code, has occurred with respect to any Employee Plan, or any
      other employee benefit plan maintained by it or any of its Subsidiaries
      which is covered by Title I of ERISA, which could subject any person to
      liability under Title I of ERISA or to the imposition of any tax under
      Section 4975 of the Code; no Employee Plan subject to Part III of Subtitle
      B of Title I of ERISA or Section 412 of the Internal Revenue Code, or
      both, has incurred any "accumulated funding deficiency," as defined in
      Section 412 of the Code, whether or not waived; neither North Country nor
      any of its Subsidiaries has failed to make any contribution or pay any
      amount due and owing as required by the terms of any Employee Plan or
      Benefit Arrangement. Neither North Country nor any of its Subsidiaries has
      incurred or expects to incur, directly or indirectly, any liability under
      Title IV of ERISA arising in connection with the termination of, or a
      complete or partial withdrawal from, any plan covered or previously
      covered by Title IV of ERISA which could constitute a liability of North
      Country or any of its Subsidiaries at or after the Closing.

<PAGE>

      (z) Information Furnished. No statement contained in any Regulatory
Filing, schedule, certificate or other document furnished (whether before, on or
after the date of this Agreement) or to be furnished in writing by or on behalf
of North Country or any of its Subsidiaries pursuant to this Agreement contains
or will contain any untrue statement of a material fact or any omit to state any
material fact necessary in order to make the statements and information
contained therein not misleading in light of the circumstances under which such
statements were made.

      (aa) Property and Assets. Either North Country or one of its Subsidiaries
is the sole and absolute owner of all of the assets (real and personal, tangible
and intangible) reflected in the financial statements referred to in Section
5.1(i) or acquired subsequent thereto (other than assets which are leased under
leases capitalized in accordance with generally accepted accounting principles
and assets which have been disposed of since the date of such financial
statements). North Country and its Subsidiaries have good and marketable title
to all such assets free and clear of any and all Encumbrances. No Person has any
written or oral agreement, option, understanding, or commitment, or any right or
privilege capable of becoming an agreement, for the purchase from North Country
or any of its Subsidiaries of any of the material assets owned or leased by any
of them. North Country and its Subsidiaries enjoy peaceful and undisturbed
possession under all material leases for the use of real property or personal
property under which they are the lessee; all of such leases are valid and
binding and in full force and effect, and neither North Country nor any of its
Subsidiaries is in default in any material respect under any such lease. Except
as set forth in Section 5.1(aa) of the Disclosure Schedule, no default will
arise under any material real property, material personal property lease or
material intellectual property license by reason of the consummation of the
transactions contemplated by this Agreement without the lessor's or licensor's
consent. There has been no material physical loss, damage or destruction,
whether or not covered by insurance, affecting any of the real properties or
material personal property of it and its Subsidiaries since December 31, 2003.
All fixed assets material to North Country's or any of its Subsidiaries'
respective business and currently used by it or any of its Subsidiaries are, in
all material respects, in good operating condition and repair.

      (bb) Agreements and Instruments. Except for the Order, except as set forth
in Section 5.1(bb) of the Disclosure Schedule or except as set forth in, or
incorporated by reference into, its SEC Reports filed after December 31, 2003
and before the date of this Agreement, neither North Country nor any of its
Subsidiaries is a party to (a) any material agreement, arrangement or commitment
not made in the ordinary course of business, (b) any agreement, indenture or
other instrument relating to the borrowing of money by North Country or any of
its Subsidiaries or the guarantee by it or of its Subsidiaries of any such
obligation, (c) any agreements to make loans or for the provision, purchase or
sale of goods, services or property between North Country or any of its
Subsidiaries and any director or officer of it or any of its Subsidiaries or any
affiliate or member of the immediate family of any of the foregoing, (d) any
agreements with or concerning any labor or employee organization to which North
Country or any of its Subsidiaries is a party, (e) any agreements between North
Country or any of its Subsidiaries and any 5% or more shareholder of North
Country and (f) any agreements, directives, orders or similar arrangements
between or involving North Country or any of its Subsidiaries and any Regulatory
Authority.

      (cc) Material Contract Defaults. Neither North Country nor any of its
Subsidiaries nor the other party thereto is in default in any respect under any
contract, agreement, commitment, arrangement, lease, insurance policy or other
instrument to which North Country or any Subsidiary of North Country is a party
or by which its respective assets, business or operations may be bound or
affected or under which it or its respective assets, business or operations
receives benefits, which default is reasonably expected to have either
individually or in the aggregate a Material Adverse Effect, and there has not
occurred any event that, with the lapse of time or the giving of notice or both,
would constitute such a default.

      (dd) Tax Matters.

            (i) North Country and each of its Subsidiaries have duly and
      properly filed all federal, state, local and other tax returns and reports
      required to be filed by them and have made timely payments of all taxes
      shown thereon to be due and payable, whether disputed or not; and there is
      no agreement by North Country or

<PAGE>

      any of its Subsidiaries for the extension of time for the assessment or
      payment of any taxes payable. Neither the Internal Revenue Service nor any
      other taxing authority is now asserting or, to the best knowledge or North
      Country, threatening to assert any deficiency or claim for additional
      taxes (or interest thereon or penalties in connection therewith), nor is
      North Country aware of any basis for any such assertion or claim. North
      Country and each of its Subsidiaries have complied in all material
      respects with applicable Internal Revenue Service backup withholding
      requirements. North Country and each of its Subsidiaries have complied
      with all applicable state law tax collection and reporting requirements.

            (ii) Adequate provision for any unpaid federal, state, local or
      foreign taxes due or to become due from North Country or any of its
      Subsidiaries for all periods through and including March 31, 2004 has been
      made and is reflected in its March 31, 2004 financial statements referred
      to in Section 5.1(i) and has been or will be made with respect to periods
      ending after March 31, 2004.

      (ee) Environmental Matters.

            (i) To the best knowledge of North Country, neither North Country
      nor any of its Subsidiaries owns, leases, or otherwise controls any
      property affected by toxic waste, radon gas or other hazardous conditions
      or constructed in part with the use of asbestos which requires removal or
      encapsulation. Neither North Country nor any of its Subsidiaries is aware
      of, nor has it or any of its Subsidiaries received written notice from any
      governmental or regulatory body of, any past, present or future
      conditions, activities, practices or incidents which may interfere with or
      prevent compliance or continued compliance with hazardous substance or
      other environmental laws or any regulation, order, decree, judgment or
      injunction, issued, entered, promulgated or approved thereunder or which
      may give rise to any common law or legal liability or otherwise form the
      basis of any claim, action, suit, proceeding, hearing, investigation or
      remediation activity based on or related to the manufacture, processing,
      distribution, use, treatment, storage, disposal, transport or handling, or
      the emission, discharge, release or threatened release into the
      environment, of any pollutant, contaminant, chemical or industrial, toxic
      or hazardous substance or waste. There is no civil, criminal or
      administrative claim, action, suit, proceeding, hearing or investigation
      pending or, to its knowledge, threatened against North Country or any of
      its Subsidiaries relating in any way to such hazardous substance laws or
      any regulation, order, decree, judgment or injunction issued, entered,
      promulgated or approved thereunder. There is no reasonable basis for any
      such claim, action, suit, proceeding, hearing, investigation or
      remediation activity that would impose any material liability on North
      Country or any of its Subsidiaries.

            (ii) To North Country's best knowledge, none of its "Loan Portfolio
      Properties, Trust Properties and Other Properties" (as defined in this
      Section) is in violation of or has any liability absolute or contingent,
      under any environmental laws or regulation. There are no actions, suits,
      demands, notices, claims, investigations or proceedings pending or
      threatened relating to any of its Loan

<PAGE>

      Portfolio Properties, Trust Properties and Other Properties (including any
      notices, demand letters or requests for information from any federal or
      state environmental agency relating to any such liability under or
      violation of environmental laws or regulation), which would impose a
      liability upon North Country or its Subsidiaries pursuant to any
      environmental laws or regulation. "Loan Portfolio Properties, Trust
      Properties and Other Properties" means, with respect to North Country and
      its Subsidiaries, any real property, interest in real property,
      improvements, appurtenances, rights and personal property attendant
      thereto, which is owned, leased as a landlord or a tenant, licensed as a
      licensor or licensee, managed or operated or upon which is held a
      mortgage, deed of trust, deed to secure debt or other security interest by
      it or any of its Subsidiaries whether directly, as an agent, as trustee or
      other fiduciary or otherwise.

      (ff) Loan Portfolio; Portfolio Management.

            (i) All evidences of indebtedness reflected as assets in its
      financial statements at December 31, 2003 referred to in Section 5.1(i),
      or originated or acquired since such date, are (except with respect to
      those assets which are no longer assets of it or any of its Subsidiaries)
      binding obligations of the respective obligors named therein except as
      enforcement may be limited by bankruptcy, insolvency or other similar laws
      affecting the enforcement of creditors' rights generally and except as to
      the availability of equitable remedies, including specific performance,
      which are subject to the discretion of the court before which a proceeding
      is brought, and the payment of no material amount thereof (either
      individually or in the aggregate with other evidences of indebtedness) is
      subject to any defenses or offsets which have been threatened or asserted
      against it or any Subsidiary, except as set forth in Section 5.1(ff) of
      the Disclosure Schedule. All such indebtedness which is secured by an
      interest in real property is secured by a valid and perfected mortgage
      lien having the priority specified in the loan documents. All such
      indebtedness which is secured by an interest in personal property is
      secured by a valid and perfected security interest having the priority
      specified in the loan documents. All loans originated, directly or
      indirectly, or purchased by North Country or any of its Subsidiaries were
      at the time entered into and at all times owned by North Country or its
      Subsidiaries in compliance in all material respects with all applicable
      laws and regulations (including all consumer protection laws and
      regulations). North Country and its Subsidiaries (as applicable)
      administer their loan and investment portfolios (including, but not
      limited to, adjustments to adjustable mortgage loans) in accordance with
      all applicable laws and regulations and the terms of applicable
      instruments. The records of North Country and any of its Subsidiaries (as
      applicable) regarding all loans outstanding on its books are accurate in
      all material respects.

            (ii) Section 5.1(ff) of the Disclosure Schedule sets forth a list,
      accurate and complete in all material respects, of the aggregate amounts
      of loans, extensions of credit and other assets of it and its Subsidiaries
      that have been adversely designated, criticized or classified by it as of
      March 31, 2004, separated by category of classification or criticism (the
      "Asset Classification"); and no

<PAGE>

      amounts of loans, extensions of credit or other assets that have been
      adversely designated, classified or criticized as of the date hereof by
      any representative of any governmental or regulatory authority as "Special
      Mention," "Substandard," "Doubtful," "Loss" or words of similar import are
      excluded from the amounts disclosed in the Asset Classification, other
      than amounts of loans, extensions of credit or other assets that were
      charged off by North Country or any of its Subsidiaries before the date
      hereof.

      (gg) Real Estate Loans; Investments.

            (i) Except for properties acquired in settlement of loans, there are
      no facts, circumstances or contingencies known to North Country which
      exist and would require a material reduction under generally accepted
      accounting principles in the present carrying value of any of the real
      estate investments, joint ventures, construction loans, other investments
      or other loans of it or any of its Subsidiaries (either individually or in
      the aggregate with other loans and investments).

            (ii) North Country and its Subsidiaries have good and marketable
      title to all securities held by it (except securities sold under
      repurchase agreements or held in any fiduciary or agency capacity), free
      and clear of any Encumbrance, except to the extent such securities are
      pledged in the ordinary course of business consistent with prudent banking
      practices to secure obligations of North Country or any of its
      Subsidiaries. Such securities are valued on its books in accordance with
      generally accepted accounting principles. No investment material to North
      Country or any of its Subsidiaries is subject to any restrictions,
      contractual, statutory or other, that would materially impair the ability
      of North Country or any of its Subsidiaries to dispose freely of any such
      investment at any time, except restriction on the public distribution or
      transfer of any such investments under the Securities Act and the
      regulations thereunder or state securities laws and pledges or security
      interests given to secure public funds on deposit with any of its
      Subsidiaries.

      (hh) Derivatives Contracts. Neither North Country nor any of its
Subsidiaries is a party to or has agreed to enter into an exchange-traded or
over-the-counter swap, forward, future, option, cap, floor or collar financial
contract or any other contract not included in its financial statement as of
March 31, 2004 which is a derivatives contract (including various combinations
thereof) (each, a "Derivatives Contract") or owns securities that are identified
in Thrift Bulletin No. 65 or otherwise referred to as structured notes (each, a
"Structured Note"), except for those Derivatives Contracts and Structured Notes
set forth in Section 5.1(hh) of the Disclosure Schedule, including a list, as
applicable, of any of its or any of its Subsidiaries' assets pledged as security
for a Derivatives Contract.

      (ii) Intellectual Property.

            (i) North Country and each of its Subsidiaries own or have the right
      to use pursuant to license, sublicense, agreement or permission all
      intellectual property necessary for the operation of its respective
      business as presently conducted and as presently proposed to be conducted.
      The term "intellectual property" means all trademarks, service marks,
      logos, trade names and corporate names and registrations and applications
      for registration thereof, copyrights and registrations and applications
      for registration thereof, computer software, data and

<PAGE>

      documentation, trade secrets and confidential business information
      (including financial, marketing and business data, pricing and cost
      information, business and marketing plans, and customer and supplier lists
      and information), other proprietary rights, and copies and tangible
      embodiments thereof (in whatever form or medium).

            (ii) Neither North Country nor any of its Subsidiaries has
      interfered with, infringed upon, misappropriated or otherwise come into
      conflict with any intellectual property rights of third parties and none
      of North Country, its Subsidiaries and their respective directors and
      officers (and employees with responsibility for intellectual property
      matters) has ever received any charge, complaint, claim or notice alleging
      any such interference, infringement, misappropriation or violation. To the
      best knowledge of North Country, no third party has interfered with,
      infringed upon, misappropriated or otherwise come into conflict with any
      intellectual property rights of North Country or any of its Subsidiaries.

            (iii) As to each item of intellectual property that any third party
      owns and that North Country or any of its Subsidiaries uses pursuant to
      license, sublicense, agreement, or permission: (a) the license,
      sublicense, agreement or permission covering the item is legal, valid,
      binding, enforceable and in full force and effect; (b) the license,
      sublicense, agreement or permission will continue to be legal, valid,
      binding and enforceable and in full force and effect on identical terms on
      and after the Closing Date; (c) no party to the license, sublicense,
      agreement or permission is in breach or default, and no event of default
      has occurred which with notice or lapse of time, or both, would constitute
      a breach or default or permit termination, modification or acceleration
      thereunder; (d) no party to the license, sublicense, agreement or
      permission has repudiated any provision thereof; and (e) neither North
      Country nor any of its Subsidiaries has granted any sublicense or similar
      right with respect to the license, sublicense, agreement or permission.

      (jj)No Investment Company. Neither North Country nor any of its
Subsidiaries is an "investment company," or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.

      (kk) Insurance. North Country and the Subsidiaries, including the Bank,
have in full force and effect policies of insurance with respect to their
respective assets and businesses against such casualties and contingencies and
in such amounts, types and forms as are appropriate for their respective
businesses, operations, properties and assets, including directors' and
officers' insurance for the directors and officers of North Country. North
Country has provided NCFC Recapitalization with complete and accurate copies of
all such insurance policies, and bonds carried by North Country or any of the
Subsidiaries. No insured is in default under any such insurance policy or bond
such that it can be cancelled, and all material claims thereunder have been
filed on a timely basis. Except as set forth in Section 5.1 (kk) of the
Disclosure Schedule, no insurer under any

<PAGE>

such insurance policy or bond has rejected or denied coverage with respect to
any filed claim, in whole or in part.

      (ll) Placement Agent Agreement. North Country hereby remakes in favor of
NCFC Recapitalization and the Investors each of the representations and
warranties set forth in Section 2 of the Placement Agent Agreement.

                            Article 6 Indemnification

6.1. Survival.

      (a) All representations, warranties, covenants and agreements contained in
this Agreement or in any document delivered pursuant hereto shall survive the
Closing.

      (b) The rights of indemnification and other remedies based on such
representations, warranties, covenants and obligations will not be affected by
any investigation conducted with respect to, or any knowledge acquired (or
capable of being acquired), at any time, whether before or after execution and
delivery of this Agreement or the Closing Date, with respect to the accuracy or
inaccuracy of or compliance with any such representations, warranties, covenants
and obligations. All such representations and warranties are contractual
provisions, entitling the party suffering Damages based on the breach thereof to
indemnification in accordance with the terms of this Agreement without necessity
of reliance thereon.

6.2. Indemnification.

      (a) North Country shall indemnify, defend, pay, reimburse and hold
harmless NCFC Recapitalization and each of the Investors from and against any
and all Damages related to, caused by or arising from, any inaccuracy in any
representation, misrepresentation, breach of any warranty or breach or failure
to fulfill any covenant or agreement by North Country contained herein (whether
as of the date of this Agreement or the Closing Date). The Investors shall not
be entitled to recover Damages from North Country under this Section 6.2 unless
the aggregate of all Damages claimed by the Investors first equals or exceeds a
cumulative of $100,000, in which case the Investors shall be entitled to recover
all such Damages (including the first $100,000).

      (b) Following the assertion of any claim by a third party or the
occurrence of any event or the discovery of any facts or conditions which could
reasonably be expected to give rise to a claim for indemnification from North
Country (the "Indemnitor") under this Article 6, the party to be indemnified
(the "Indemnitee") shall promptly thereafter notify the Indemnitor in writing of
such claim, setting forth in reasonable detail the specific facts and
circumstances relating to such claim and the amount of Damages claimed (or an
estimate thereof if the actual amount is not known or not capable of reasonable
calculation) (an "Indemnification Notice"); provided, that any delay in giving
any such notice shall not affect such parties' rights to indemnification
hereunder except to the extent of any demonstrable prejudice to the Indemnitor.

      (c) If the facts or conditions giving rise to the right of indemnification
under this Article 6 involve any actual or threatened claim or demand by a third
party against an Indemnitee (a "Third Party Claim"), the Indemnitor shall have
thirty (30) days following receipt of the Indemnification Notice in respect of
such Third Party Claim to advise the Indemnitee whether the Indemnitor disputes
or accepts, in whole or in part, its liability to the Indemnitee and/or whether
the Indemnitor desires to defend the Indemnitee against such Third Party Claim.
Assuming the Indemnitor is liable for any properly notified Third Party Claim,
the Indemnitor shall have no obligation to the Indemnitee for legal fees
incurred by the Indemnitee prior to or during such thirty day period in
connection with such Third Party Claim other than reasonable legal costs
necessarily to avoid a default judgment and/or to maintain the status quo. In
the event the Indemnitor determines to accept the defense of any such Third
Party Claim, the Indemnitee shall have the right to be represented by its own
counsel, its participation to be subject to the reasonable direction of the
Indemnitor, and the Indemnitee shall provide all requested waivers and
authorities to permit the Indemnitor to defend such Third Party Claim. The
Indemnitor shall provide, to the Indemnitee's satisfaction, evidence that the
Indemnitor has the financial ability both to defend the claim and to indemnify
the Indemnitee if such defense is not successful. Counsel selected by the
Indemnitee to act on its behalf in

<PAGE>

the defense of a Third Party Claim shall be at the Indemnitee's sole cost and
expense; provided, however, that if the Indemnitee determines in good faith that
there exists a conflict of interest between the Indemnitor and the Indemnitee or
that the Indemnitor did not satisfactorily demonstrate financial ability, the
Indemnitee shall have the right to engage separate counsel, the reasonable costs
and expenses (including reasonable attorneys fees) of which shall be paid by the
Indemnitor, but in no event shall the Indemnitor be liable for the costs and
expenses of more than one such separate counsel. If the Indemnitor fails to
undertake the defense of or settle or pay any Third Party Claim within thirty
(30) days following receipt of the Indemnification Notice in respect of such
Third Party Claim, or if the Indemnitor, after having given notification to the
Indemnitee that it intends to assume the defense, fails within thirty (30) days
from its receipt of the Indemnification Notice to defend, settle or pay such
Third Party Claim, then the Indemnitee may take any and all necessary actions to
dispose of the Third Party Claim including the settlement or full payment
thereof upon such terms as it shall deem appropriate, in its sole discretion,
with respect to any proposed settlement thereof. Notwithstanding the foregoing,
however, Indemnitee shall in all cases be entitled to control of the defense of
any action (provided that Indemnitee does so in good faith) if it (i) may result
in injunctions or other equitable remedies in respect of the Indemnitee; (ii)
may result in liabilities which, taken with other then existing claims by
Indemnitee, would not be fully indemnified hereunder; or (iii) may have an
adverse impact on the business or the financial condition of the Indemnitee even
if Indemnitor shall pay all indemnification amounts in full. In the event that
the Indemnitee exercises its right to control the defense of the action pursuant
to the preceding sentence, the Indemnitor shall be liable for the reasonable
costs and expenses (including reasonable attorneys fees) incurred by Indemnitee
in doing so.

      (d) In the event that the Indemnitor has not assumed the defense,
settlement or payment of a Third Party Claim and in failing to do so, has not
admitted its liability for such Third Party Claim in writing to the Indemnitee,
then the Indemnitee shall be entitled to settle such Third Party Claim in any
manner which it determines. In the event the Indemnitee exercises its right to
control the defense of an action as permitted in the penultimate sentence of
Section 6.2(c), Indemnitee may settle the Third Party Claim that it has agreed
to settle, pay or defend on terms which it may deem reasonable; provided,
however, that the Indemnitee shall not, without the Indemnitor's written
consent, which shall not be unreasonably withheld or delayed (i) settle or
compromise any such proceeding, claim or demand, or consent to the entry of any
judgment which does not include as an unconditional term thereof the delivery by
the claimant or plaintiff to the Indemnitor of a written release from all
Liability in respect of such proceeding, claim or demand, or (ii) settle or
compromise any such proceeding, claim or demand in any manner that may adversely
affect the Indemnitor.

      (e) The Indemnitor may settle a Third Party Claim that it has agreed to
settle, pay or defend on terms which it may deem reasonable; provided, however,
that the Indemnitor shall not, without the Indemnitee's prior written consent,
which shall not be unreasonably withheld or delayed (i) settle or compromise any
such proceeding, claim or demand, or consent to the entry of any judgment which
does not include as an unconditional term thereof the delivery by the claimant
or plaintiff to the Indemnitee of a written release from all Liability in
respect of such proceeding, claim or demand, or (ii) settle or compromise any
such proceeding, claim or demand in any manner that may adversely affect the
Indemnitee.

      (f) Except for Third Party Claims, the Indemnitor shall have thirty (30)
days to advise the Indemnitee of whether it disputes or accepts liability to the
Indemnitee for all other indemnification claims that are the subject of an
Indemnification Notice delivered to the Indemnitor as provided in Section 6.2(b)
above.

      (g) Schedule 7 hereto includes additional indemnification and other
covenants of North Country that are incorporated by reference herein. Schedule
7, rather than the foregoing provisions of this Article 6, shall apply to the
matters set forth in the schedule.

      (h) The remedies provided by this Article 6 and Schedule 7 shall not be
exclusive of or limit any other remedies that may be available to NCFC
Recapitalization or any of the Investors.

                             Article 7 Miscellaneous

7.1 No Other Representations, Warranties or Covenants. Except as expressly set
forth in this Agreement or the Definitive Subscription Documents, there are no
other representations, warranties, statements, covenants of any of the parties
and no party is authorized to rely, and each party agrees that it is not relying
upon, any other representations, warranties, covenants or agreements.

7.2 Further Assurances. Each party agrees to do, execute, acknowledge and
deliver or cause to be done, executed, acknowledged and delivered any and all
such further acts, instruments, papers and documents

<PAGE>

and will give such further assurances, as may be reasonably requested by another
party as necessary or proper to implement the provisions of this Agreement or
otherwise to carry out and effectuate the intent and purposes of this Agreement.

7.3 Notices. All notices, requests, waivers and consents under this Agreement
directed to a party shall be in writing and shall be effective upon receipt, if
delivered by hand (including by mail, courier or otherwise) or facsimile
transmission. All notices, requests and consents hereunder shall be addressed or
directed to the applicable Notice Address(es).

7.4 Entire Agreement. This Agreement, together with the Definitive Subscription
Documents and the Confidentiality Agreement, constitute the entire agreement
between the parties hereto pertaining to the subject matter hereof and, if the
Closing occurs, shall supersede all prior and contemporaneous agreements,
understandings, representations, warranties, negotiations and discussions,
whether oral or written, of the parties, and there are no warranties,
representations or other agreements between or among the parties in connection
with the subject matter hereof except as specifically set forth herein.

7.5 Amendments; Governing Law. This Agreement may be amended by the parties
hereto at any time, but only by an instrument in writing duly executed and
delivered on behalf of NCFC Recapitalization, North Country and the Investors
(by NCFC Recapitalization pursuant to Section 7.13). This Agreement shall be
construed and enforced in accordance with and governed by the laws of the State
of Michigan (without regard to conflicts of law principles).

7.6 Successors and Assigns. This Agreement may not be assigned by any party
without the prior written consent of NCFC Recapitalization and North Country.
All of the terms and provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their successors and permitted
assigns.

7.7 Captions. The titles of the articles and sections of this Agreement have
been inserted as a matter of convenience of reference only and shall not control
or affect the meaning or construction of any of the terms or provisions hereof.

7.8 Waivers. Any waiver of any breach of or failure to comply with any provision
of this Agreement shall be in writing and approved by the party which is not in
non-compliance with or breach of this Agreement (or, in the case of waivers by
the Investors, NCFC Recapitalization pursuant to Section 7.13). Any such waiver
shall be strictly construed and shall not be interpreted as or constitute a
continuing waiver of the relevant provision or a waiver of any other breach of,
or failure to comply with, any other provision of this Agreement.

7.9 Counterparts. This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original and all of which shall constitute one
agreement.

7.10 Severability. If any provision of this Agreement shall be deemed or
declared to be unenforceable, invalid or void, the same shall not impair any of
the other provisions of this Agreement, which shall be enforced in accordance
with their respective terms. The parties intend that each provision of this
Agreement be enforced to the maximum extent permissible under applicable law
and, should any provision of this Agreement be unenforceable because of its
scope, the time period covered or otherwise, the provision shall be deemed to be
reduced, limited and/or changed to enable the provision to be enforced to the
maximum permissible extent under the laws and public policies applied in the
jurisdiction in which enforcement is sought.

7.11 No Third Party Beneficiaries. This Agreement is intended to be for the sole
benefit of, and to be enforced by, the parties except if the Closing shall
occur, this Agreement is also for the benefit of and may be enforced by each of
the Investors. No Person other than the parties shall have any rights under this
Agreement, and none of the provisions of this Agreement shall be enforced by,
any such Person, except that if the Closing shall occur each Investor shall have
rights under this Agreement and may enforce this Agreement.

7.12 Facsimile Signatures. Facsimile signatures to this Agreement shall be
considered originals hereof, with any party executing this Agreement by
facsimile signature agreeing to provide promptly to the other parties an
original signature evidencing the same.

7.13 Authorization of NCFC Recapitalization; Actions by Investors.

      (a) By joining in this Agreement as contemplated by Section 2.1, each
Investor irrevocably appoints NCFC Recapitalization as the Investor's agent and
attorney-in-fact for all purposes under this Agreement including exercising,
taking, performing and making all rights, covenants, actions, decisions,
elections, amendments and waivers under this Agreement (by NCFC Recapitalization
or the Investors) including determining whether any of the Investors' Closing
Conditions have been satisfied; waiving any

<PAGE>

of the Investors' Closing Conditions (either generally or in a particular
instance, either retroactively or prospectively and either for a specific time
or indefinitely); agreeing to any amendment to this Agreement; extending the
Closing Deadline; reviewing, accepting, agreeing or disagreeing with the Closing
Schedule and any computations therein; resolving with North Country any Notice
of Disagreement; and/or terminating this Agreement, in each case as NCFC shall
determine appropriate in its discretion, except only that any amendment to the
Summary of Terms, any waiver of any of the Investors' Closing Conditions
described in Sections 4, 5, 11, 12, 13, 16, 17, 20, 21, 24, 26, and 27 of Part I
of Schedule 3, and any extension of the Closing Deadline beyond December 31,
2004, shall require the written approval of not less than Two Thirds of the
Investors. For clarification, NCFC shall have the power and authority to make
such determinations as it deems appropriate as to whether particular Investors'
Closing Conditions have been satisfied. In making any such determination or any
other determination under this Agreement, NCFC Recapitalization may rely,
without any further inquiry or investigation, upon any certification or
confirmation, oral or written, given by North Country or any of its Subsidiaries
or any other Person whatsoever (including the certificate described in Section
24 of Part I of Schedule 3). If NCFC Recapitalization shall determine that one
or more of the Investors' Closing Conditions shall not be satisfied it shall
have the further power and authority to determine whether to waive any such
Investors' Closing Condition except that waiver of any of the conditions that
require the approval of Two Thirds of the Investors as specified above in this
Section 7.13(a) shall require such approval. The grant of the authority and
powers under this Agreement are coupled with an interest and irrevocable, and
are durable powers of attorney granted by each of the Investors. The grant of
the authority and powers under this Agreement shall expire once all North
Country Shares to be issued to the Investors shall have been so issued.

      (b) None of NCFC Recapitalization or any of its members, managers,
employees or agents shall be liable or responsible for, and each Investor and
North Country irrevocably waives, releases and agrees to not assert, any claim
or cause of action against NCFC Recapitalization or any of its members,
managers, employees or agents under any theory whatsoever (including negligence)
for, or in connection with, this Agreement; any of the Subscription Documents;
any of the Offering Documents; the Proxy Statement; any of the Regulatory
Filings; or any related materials; the proposal, development, adequacy,
reasonableness, implementation, or results to be obtained by any business plan
or strategy for North Country or any of its Subsidiaries (regardless of any
participation by NCFC Recapitalization or any of its members, managers,
employees or agents); or any action taken or omitted under this Agreement
(including any of the determinations or waivers referred to in Article 4, this
Section 7.13 or Schedule 3, any diligence or other review of North Country and
its Subsidiaries (including the adequacy or scope of the review, any information
discovered in connection with the review, or otherwise), except only in the case
of NCFC Recapitalization for gross negligence or willful violation of law. North
Country and the Investors acknowledge and agree that NCFC Recapitalization has
not, and will not, make any representation, warranty, assurance, or statement
under or in connection with this Agreement; any of the Subscription Documents;
any of the Offering Documents; the Proxy Statement; any of the Regulatory
Filings; or related materials; or the proposal, development, adequacy,
reasonableness, implementation, or results to be obtained by any business plan
or strategy for North Country or any of its Subsidiaries, and the Investors and
North Country each acknowledge and agree they are not relying on any such
representation, warranty, assurance or statement in entering into this
Agreement, any of the Subscription Documents or otherwise, and the only
information supplied or to be supplied by NCFC Recapitalization or any of its
members for inclusion in any of those materials will be information supplied in
writing by NCFC Recapitalization as to NCFC Recapitalization itself and its
members expressly for inclusion therein.

      (c) Except as otherwise expressly set forth in this Agreement to the
contrary, any consent, election, waiver, amendment or other action by the
"Investors" under or as contemplated by this Agreement may be taken by, and
shall be deemed to be effective only with the consent of, NCFC Recapitalization
as provided in this Section 7.13 or Two Thirds of the Investors, and when taken,
shall be binding and enforceable against each of the Investors (whether or not
the Investor shall have consented to the matter in question).

7.14 Relationship of Parties. The relationship between the parties is that of
independent contractors and not of employer-employee, principal-agent or
partners. No party is the legal representative of any other party nor has the
right or authority to assume or undertake any obligation or make any
representation on behalf of any other party.

7.15 Expenses. Except as otherwise expressly set forth in this Agreement, each
party shall pay its on expenses incurred in connection with the transactions
contemplated hereby.

<PAGE>

7.16 Acknowledgment and Waiver. The parties acknowledge and agree as follows:
Miller, Canfield, Paddock and Stone, P.L.C. ("Miller Canfield") has represented
NCFC Recapitalization in preparing this Agreement and the transactions
contemplated by this Agreement and has not represented any of the Investors in
connection with this Agreement or the transactions contemplated hereby.

                  [Remainder of Page Intentionally Left Blank]

<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

                                NORTH COUNTRY FINANCIAL CORPORATION

                                By: /s/C. James Bess
                                    ---------------------------------
                                    Name: C. James Bess
                                    Title: President and Chief Executive Officer

                                North Country Financial Corporation
                                130 S. Cedar Street
                                Manistique, Michigan 49854
                                Attn:     C. James Bess
                                          President and Chief Executive Officer
                                Facsimile: (906) 341-7879

                         With a copy to:

                         Werner & Blank, LLC
                         7205 West Central Avenue
                         Toledo, Ohio 43617
                         Attn:     E. L. Herbert, Esq.
                         Facsimile:  (419) 841-8380

                                NCFC RECAPITALIZATION, LLC

                                By: /s/ Eliot R. Stark
                                    ---------------------------------
                                  Name:   Eliot R. Stark
                                  Title:  A Member

                                and

                                By: /s/ Paul D. Tobias
                                    ---------------------------------

                                  Name:    Paul D. Tobias
                                  Title:   A Member

                                NCFC Recapitalization, LLC
                                c/o 38710 Woodward Ave, Suite 240
                                Bloomfield Hills, Michigan 48304-6913
                                Attn;  Eliot R. Stark and Paul D. Tobias

                         With a copy to:

                         Miller, Canfield, Paddock and Stone, P.L.C.
                         840 West Long Lake Road, Suite 200
                         Troy, Michigan 48098-6358
                         Attn:     David D. Joswick, Esq.
                                Facsimile: (248) 267-3252

<PAGE>

                                   Schedule 1

                     Certain Definitions and Interpretation

      Certain Definitions. In this Agreement or in any Schedule, and in any
amendment hereto or thereto, unless the context otherwise requires or unless
otherwise defined in any such Schedule or amendment, the following words and
phrases shall have the meanings set forth after them.

            "Accounting Firm" means Plante & Moran, PLLC, or such other
      nationally recognized accounting firm as may be agreed upon in writing by
      NCFC Recapitalization and North Country.

            "Accredited Investor" has the meaning set forth in Rule 501(a) of
      Regulation D.

            "Acquisition Event" means that North Country shall have authorized,
      recommended, or approved, or entered into an agreement with any person,
      entity or group (other than any of the parties to this Agreement) to
      effect an Acquisition Proposal.

            "Acquisition Proposal" means any proposal or transaction involving a
      merger, consolidation or other business combination transaction involving,
      or any purchase or all or any significant portion of the assets of, or any
      equity interest in, North Country or any of its Subsidiaries.

            "Bank" means North Country Bank and Trust, a wholly-owned subsidiary
      of North Country.

            "Benefit Arrangements" has the meaning in Section 5.1(y).

            "Best Efforts" means commercially reasonable efforts that a
      reasonably prudent person would make that desires to take the action in
      question.

            "Burdensome Condition" means any term, condition, requirement,
      restriction or limitation not reasonably acceptable to NCFC
      Recapitalization.

            "Business Day" means a day, other than a Saturday, Sunday or
      national holiday in the United States, on which banks in the State of
      Michigan are generally open for the conduct of commercial banking
      business.

            "Change in Bank Control Act" means the Change in Bank Control Act of
      1978 and the regulations promulgated thereunder, in each case as amended.

            "Closing" means the closing of the transactions contemplated in this
      Agreement. "Closing Conditions" means and includes the Investors' Closing
      Conditions and the North Country Closing Conditions.

            "Closing Date" means a date specified by NCFC Recapitalization but
      not later than five (5) Business Days after the satisfaction of the
      Investors' Closing Conditions (other than those which by their nature are
      to be satisfied by deliveries on the Closing Date or at the Closing) and
      not later than the Closing Deadline.

            "Closing Deadline" means 11:59 p.m., local time, on October 31,
      2004, provided that the Closing Deadline may be extended at the written
      election of NCFC Recapitalization or North Country as provided in Section
      3.2, and if so extended the Closing Deadline shall be 11:59 p.m. on the
      date to which the deadline has been extended.

            "Closing Schedule" has the meaning in Section 4.5(d).

            "Code" means the Internal Revenue Code of 1986 as amended and the
      regulations promulgated thereunder.

            "Confidentiality Agreement" means the letter agreement dated as of
      May 3, 2004 between North Country and Mackinac Partners as the same may be
      amended in accordance with its terms from time to time.

            "Damages" means all liabilities, obligations, damages, losses,
      diminution in value, deficiencies, penalties, fines, forfeitures,
      assessments, judgments, awards, taxes, payments, costs and expenses and
      including court costs, reasonable

<PAGE>

      attorneys fees, consultants' and experts' fees and other costs and
      expenses incident to claims, suits, proceedings, actions, demands, and
      causes of actions arising from or related to the matter or transaction in
      question or the defense or investigation thereof (whether or not
      litigation has commenced). For clarification, Damages includes all Damages
      suffered whether or not in connection with a third party claim.

            "Definitive Subscription Documents" means and includes the
      definitive subscription agreements (including suitability questionnaire
      and a counterpart signature page to this Agreement) and other agreements
      and instruments prepared by North Country pursuant to which a prospective
      Investor may subscribe for shares of North Country common stock as
      contemplated under this Agreement.

            "Derivatives Contracts" has the meaning in Section 5.1(hh).

            "Disclosure Schedule" means the disclosure schedule delivered by
      North Country to NCFC Recapitalization contemporaneously with the
      execution and delivery of this Agreement.

            "Employee Plans" has the meaning in Section 5.1(y).

            "Employment Agreements" means the separate Employment Agreements
      executed and delivered by and between North Country and Eliot R. Stark,
      Paul D. Tobias, and Jim Bess in the form attached as Schedule 5-1, 5-2 and
      5-3, respectively, contemporaneously with the execution and delivery by
      North Country of this Agreement, but effective only if the Closing shall
      occur.

            "Encumbrance" means and includes any lien, security interest,
      mortgage, claim, charge, restriction, proxy, voting agreement, right of
      third parties, or encumbrance whatsoever.

            "ERISA" has the meaning in Section 5.1(y).

            "ERISA Affiliate" has the meaning in Section 5.1(y).

            "Exclusivity Agreement" means the letter agreement dated as of May
      20, 2004 between Mackinac Partners, for itself and on behalf of the
      "Investors" referred to therein, and North Country, as the same may be
      amended in accordance with its terms from time to time.

            "Filings" has the meaning in Section 5.1(h)(ix).

            "Final Closing Schedule" has the meaning in Section 4.5(g).


            "Indemnitee" has the meaning in Section 6.2(b).

            "Indemnitor" has the meaning in Section 6.2(b).

            "Identified Claims" means and includes all claims, litigation and
      arbitrations described in Item 1 of Part II of North Country's Quarterly
      Report on Form 10-Q for the period ended June 30, 2004.

            "Investor" means a Person who or which has submitted Definitive
      Subscription Documents to a Placement Agent or North Country which have
      been accepted by North Country, and "Investors" means all of them
      collectively.

            "Investors' Closing Conditions" means and includes the conditions
      precedent set forth in part I of Schedule 3.

            "Loan Portfolio Properties, Trust Properties and Other Properties"
      has the meaning in Section 5.1(ee).

            "Mackinac Partners" has the meaning in the preamble.

            "Material Adverse Effect" means, with respect to North Country and
      its Subsidiaries, a material adverse effect on the business, assets,
      properties, results of operations, financial condition or prospects of
      North Country and its Subsidiaries taken as a whole.

            "MBCA" means the Michigan Business Corporation Act, as amended.

<PAGE>

            "MUSA" means the Michigan Uniform Securities Act and the regulations
      promulgated thereunder, in each case as amended.

            "NASDAQ Rules" means the Marketplace Rules of the Nasdaq Stock
      Market, Inc., as amended, and North Country's agreements and obligations
      under its Nasdaq listing agreement.

            "NCFC Recapitalization" has the meaning in the preamble.

            "Net Proceeds of the Offering" means the gross amount of the
      Offering proceeds minus the Placement Agent Fees of 5.0% of such gross
      amount of the Offering and less Specified Expenses in excess of $850,000
      (and the $100,000 fee to be paid to the Placement Agents as described in
      the Summary of Terms is included in the $850,000).

            "North Country" has the meaning in the preamble.

            "North Country Shares" means the shares of common stock of North
      Country to be issued to the Investors as contemplated by this Agreement.

            "North Country Stock Options" means the outstanding options and
      other awards issued by North Country under the North Country Stock Option
      Plans to purchase 535,732 shares of common stock of North Country.

            "North Country Stock Option Plans" means the Stock Option Plan; the
      Deferred Compensation, Deferred Stock and Current Stock Purchase Plan for
      Nonemployee Directors; the North Country Financial Corporation Stock
      Compensation Plan; the North Country Financial Corporation's 1997
      Directors' Stock Option Plan, and the North Country Financial Corporation
      2000 Stock Incentive Plan, all referred to more specifically in Exhibits
      10.1, 10.2, 10.3, 10.4, and 10.5 of North Country's Form 10-K for the
      period ended December 31, 2003.

            "Notice Address" means (a) in the case of a party, the address and
      facsimile number for notices set forth below such party's signature on the
      signature page(s) to this Agreement, and (b) in the case of an Investor,
      prior to the Closing c/o NCFC Recapitalization and after the Closing, the
      address and facsimile number for purposes of notice set forth in the
      Definitive Subscription Documents; or in each case to such other address
      or facsimile designated by the party or Investor for the purpose of
      notices under this Agreement in a writing delivered to the other parties.

            "Notice of Disagreement" has the meaning in Section 4.5(d).

            "Offering" means the offering by the private placement by North
      Country of the North Country Shares as contemplated by this Agreement, the
      Offering Documents and the Definitive Subscription Documents.

            "Offering Documents" means a confidential private placement
      memorandum and other offering documents, and any required amendments or
      supplements, delivered by North Country to Investors in connection with
      the offering and sale of North Country common stock as contemplated by
      this Agreement and shall also include this Agreement, the Disclosure
      Schedule, the Definitive Subscription Documents, and the SEC Reports
      identified in the private placement memorandum.

            "OFIS" means the Michigan Office of Financial and Insurance
      Services.

            "Order" means the Cease and Desist Order with respect to the Bank
      entered by the FDIC and OFIS on March 26, 2003, as the same may be
      amended, supplemented or revised in the future.

            "Placement Agents" means Keefe, Bruyette & Woods, Inc. and Howe
      Barnes Investments, Inc. engaged by North Country in connection with the
      Offering.

            "Placement Agent Agreement" means the Placement Agent Agreement
      dated as of the date of this Agreement among Keefe Bruyette & Woods, Inc.,
      as representative of the several Placement Agents, and North Country.

            "Pre-Closing Adjusted Equity" means stockholders' equity of North
      Country, at the end of the calendar month immediately preceding the
      Closing Date, determined in accordance with generally accepted accounting
      principles, consistently applied, but adjusted pursuant to the Pre-Closing
      Equity Adjustments, as set forth in the Final Closing Schedule. For
      clarification, Pre-Closing Adjusted Equity does not include the Specified
      Expenses.

            "Pre-Closing Equity Adjustments" means all of the following:

<PAGE>

            (a) Reduce stockholders' equity by the full amount of the following,
      whether or not then due, accrued or incurred:

                  (i) the full amount by which all costs and expenses of North
            Country and its Subsidiaries with respect to the transactions
            contemplated by this Agreement, including investment banking, legal
            and accounting fees and expenses, exceed $75,000; and

                  (ii) the full amount of the settlement or other resolution of
            the Identified Claims and any other litigation or claims, including
            all attorneys fees and any contingent or deferred amounts.

            (b) Do not make any adjustment for any gains that may be realized as
      a result of the redemption, retirement or repayment of any trust preferred
      securities.

            (c) Reduce stockholders' equity by the full amount of the FASB 115
      adjustment at June 30, 2004 (regardless of the actual amount of the FASB
      115 adjustment at the end of the calendar month immediately preceding the
      Closing Date).

            "Pre-Closing Outstanding Shares" means the number of shares of
      common stock of North Country issued and outstanding immediately before
      the Closing without taking into account the North Country Options
      outstanding under the North Country Stock Option Plans or the awards to be
      issued by North Country under the 2000 Stock Incentive Plan, as amended,
      as contemplated in Section 15 of Part I of Schedule 3. Based on the
      representation and warranty set forth in Section 5.1(g), the Pre-Closing
      Outstanding Shares as of the date of this Agreement are 7,019,152 shares.

            "Proxy Statement" has the meaning in Section 3.5(b).

            "Recommendation Event" means that (a) the Board of Directors of
      North Country does not, or shall indicate to NCFC Recapitalization that
      North Country is unwilling or unable to, publicly recommend in the Proxy
      Statement that its shareholders approve the North Country Shareholder
      Approval Items, or (b) after recommending in the Proxy Statement that its
      shareholders approve the North Country Shareholder Approval Items, the
      Board of Directors of North Country shall have withdrawn, modified or
      amended such recommendation in any respect materially adverse to the
      Investors.

            "Registration Rights Agreement" means the Registration Rights
      Agreement executed and delivered by North Country for the benefit of the
      Investors in the form attached as Schedule 4. contemporaneously with the
      execution and delivery by North Country of this Agreement but effective
      only if the Closing shall occur.

            "Regulation D" means Regulation D promulgated under the Securities
      Act.

            "Regulatory Approvals" means all consents and approvals required
      from all Regulatory Authorities of the transactions contemplated by this
      Agreement including, if necessary, the approval of the applicable
      Regulatory Authority under the Change in Bank Control Act.

            "Regulatory Authority" means any federal, state or local
      governmental authority having jurisdiction over any of North Country or
      any of its Subsidiaries or any of the transactions contemplated by this
      Agreement including the SEC, any state securities or "blue sky"
      administrator, any applicable industry self regulatory organization
      (including the National Association of Securities Dealers, Inc. and the
      Nasdaq Stock Market, Inc.), the Board of Governors of the Federal Reserve
      System, the Federal Deposit Insurance Corporation, the OFIS, any other
      federal or state banking authority, and any state insurance regulatory
      authority.

            "Regulatory Filings" means and includes any and all filings and
      notices required to be filed by North Country or any of its Subsidiaries
      with all Regulatory Authorities either in the ordinary course of business
      or in connection with this Agreement and the transactions contemplated by
      this Agreement, including the Securities Act, the Securities Exchange Act,
      the Change in Bank Control Act, MUSA, any other state securities or "blue
      sky" laws, and the rules of the National Association of Securities
      Dealers, Inc. and/or the NASDAQ Rules.

            "Resolved Objections" has the meaning in Section 4.5(f).

            "Review Period" has the meaning in Section 4.5(d).

            "Rights" means the preferred share purchase rights issued by the
      Company entitling the holder to purchase one one-thousandth of a share of
      Series B Junior Participating Preferred Stock, par value $.01 per share.
      The Rights are described in the Rights Agreement.

            "Rights Agreement" means the Rights Agreement dated as of June 21,
      2000 by and between North Country and the Registrar and transfer Company
      as agent.

            "SEC" means the Securities and Exchange Commission.

<PAGE>

            "SEC Reports" has the meaning in Section 5.1(i)(a).

            "Second Accounting Firm" means a nationally recognized accounting
      firm agreed upon in writing by NCFC Recapitalization and North Country.

            "Securities Act" means the Securities Act of 1933 and the
      regulations promulgated thereunder, in each case as amended.

            "Securities Exchange Act" means the Securities Exchange Act of 1934
      and the regulations promulgated thereunder, in each case as amended.

            "Shareholder Approval Items" means and includes approval of (a) the
      issuance of the North Country Shares to the Investors as contemplated by
      this Agreement, (b) an amendment to the Articles of Incorporation of North
      Country to increase the authorized common stock of North Country to
      85,000,000 shares, (c) an amendment to the Articles of Incorporation of
      North Country to change its name to "Mackinac Financial Corporation", (d)
      the amendment of North Country's 2000 Stock Incentive Plan to increase the
      authorized number of shares of common stock of North Country under the
      plan and to permit the awards to be made as contemplated in certain of the
      Employment Agreements to be priced at a per share price equal to the price
      per share in the Offering (see Section 15 of Part 1 of Schedule 3), (e)
      the reconstitution of the Board of Directors contemplated by Section 9 of
      Part 1 of Schedule 3, and (f) any other action by the shareholders of
      North Country required under applicable law or the NASDAQ Rules, or
      reasonably requested by NCFC Recapitalization, in connection with this
      Agreement or any of the transactions contemplated by this Agreement.

            "Specified Expenses" means and includes all costs, expenses, fees
      and charges incurred by NCFC Recapitalization, Mackinac Partners and the
      Placement Agents in connection with any of the transactions contemplated
      by this Agreement and including reasonable attorneys' fees of any of the
      foregoing.

            "Structured Note" has the meaning in Section 5.1(hh).

            "Subsidiary" means any entity (including any corporation,
      partnership, joint venture or other organization, whether incorporated or
      unincorporated) which North Country, directly or indirectly, owns at least
      50% of (a) the outstanding shares or other securities representing the
      right to vote for the election of directors or other managing authority or
      (b) in the case of any entity which does not have outstanding shares or
      securities, ownership interests which represent the right to make the
      decisions for such entity, whether or not such entity is consolidated with
      North Country for financial reporting purposes.

            "Summary of Terms" means the summary of terms for the investment in
      North Country contemplated by this Agreement as set forth on Schedule 2.

            "Third Party Claim" has the meaning in Section 6.2(c).

            "Two Thirds" means in the case of the Investors (a) prior to the
      Closing, Investors having submitted Definitive Subscription Documents for
      at least two-thirds in dollar amount of the Definitive Subscription
      Documents of all Investors at the time in question and (b) after the
      Closing, Investors holding at least two-thirds of the North Country Shares
      held by all Investors at the time in question.

      Construction of Certain Terms and Phrases. Unless the context of the
Agreement otherwise requires, (i) words of any gender include each other gender;
(ii) words using the singular or plural number also include the plural or
singular number, respectively; (iii) the terms "hereof," "herein," "hereby" and
derivative or similar words refer to this entire Agreement; (iv) the terms
"Section" and "Article" refer to the specified Section or Article of this
Agreement; (v) the term "Schedule" refers to the specified Schedule to this
Agreement; and (vi) "including" means "including but not limited to". This
Agreement is being entered into by and among competent and sophisticated parties
who are experienced in business matters and represented by counsel and other
advisors, and has been reviewed by the parties and their counsel and other
advisors. Therefore, any ambiguous language in this Agreement will not be
construed against any particular party as the drafter of the language.

<PAGE>

                                   Schedule 2

                                Summary of Terms

Security to be Offered:                         Shares of Common Stock to be
                                                issued by North Country.

Investment Amount:                              $30 million.

Investor Qualifications:                        Accredited Investor.

Maximum Individual Investment:                  $3,000,000, but subject to
                                                waiver by NCFC Recapitalization,
                                                in its sole discretion.

Minimum Individual Investment:                  $250,000, but subject to waiver
                                                by NCFC Recapitalization, in its
                                                sole discretion.

Total Number of Shares:                         Not less than 39,775,195 shares
                                                of common stock of North
                                                Country. The precise number of
                                                shares of North Country issued
                                                will be determined by Section
                                                4.5 (b)

                                                Minimum Closing Date Equity of
                                                $3 million. See Schedule 3.

Placement Agents:                               Keefe, Bruyette & Woods, Inc.

                                                Howe Barnes Investments, Inc.

Placement Agent Fees                            $100,000 plus 5% of the gross
                                                proceeds to the Company from the
                                                sale of the North Country Shares
                                                pursuant to this Agreement and
                                                reimbursement of expenses.

Use of Proceeds:                                Payment or reimbursement of all
                                                expenses.

                                                Redemption of all trust
                                                preferred securities.

                                                Contribution of additional
                                                capital to the Bank.

                                                Repayment of Federal Home Loan
                                                Bank advances made to the Bank.

                                                Other general corporate
                                                purposes.

Amendments to North Country Stock Option Plans  The North Country Stock Option
                                                Plans to be amended to increase
                                                the number of shares that may be
                                                subject to awards made at or
                                                after the Closing under the
                                                plans to 12.5% of the total
                                                number of shares to be
                                                outstanding after the Closing
                                                Date. The number of shares to be
                                                subject to each plan shall be
                                                determined prior to Closing by
                                                NCFC Recapitalization. The 2000
                                                Stock Incentive Plan will be
                                                further amended to permit the
                                                options to be awarded as
                                                contemplated under certain
<PAGE>

                                                of the Employment Agreements
                                                (see Schedule 5) to be priced at
                                                the per share price in the
                                                Offering and to continue to vest
                                                and be exercisable
                                                notwithstanding termination of
                                                the Employment Agreements as
                                                contemplated in the agreements.

Registration Rights                             North Country will use its Best
                                                Efforts to prepare and file a
                                                registration statement on Form
                                                S-3 under the Securities Act
                                                covering the North Country
                                                Shares on or before the date
                                                that is 30 days after the
                                                Closing Date and will use its
                                                Best Efforts to cause such
                                                registration statement to become
                                                effective as soon as practicable
                                                after filing, and in any event
                                                no later than December 31, 2004.
                                                North Country will further use
                                                its Best Efforts to maintain the
                                                effectiveness of such
                                                registration statement until the
                                                earliest of (i) the date that is
                                                two years after the Closing Date
                                                and (ii) the date on which all
                                                of the North Country Shares have
                                                been sold pursuant to such
                                                registration statement. See
                                                Schedule 4.

Expenses:                                       North Country to pay or
                                                reimburse NCFC Recapitalization,
                                                Mackinac Partners and the
                                                Placement Agents for all
                                                Specified Expenses.

                                                North Country to also pay all of
                                                its own costs, expenses and fees
                                                including Placement Agent Fees.

                                                Total expenses not to exceed
                                                $2.5 million unless the Offering
                                                is increased at the behest of
                                                North Country or in the event of
                                                the occurrence of a material
                                                adverse event and not including
                                                costs and expenses relating to
                                                the registration statement (see
                                                Registration Rights above).

Other Terms and Conditions:                     As provided in this Agreement
                                                and other terms, conditions,
                                                representations and warranties
                                                customary for a transaction of
                                                the character contemplated by
                                                this Agreement.

<PAGE>

                                   Schedule 3

                               Closing Conditions

Part I: Investors' Closing Conditions.

1.    Negotiation, execution and delivery by the Investors and North Country of
      Definitive Subscription Documents (including a North Country subscription
      agreement and investment questionnaire).

2.    Accuracy as of the Closing Date, in all material respects, of North
      Country's representations and warranties in this Agreement and the
      Definitive Subscription Documents.

3.    Performance by North Country, in all material respects, of its covenants
      and agreements in this Agreement and the Definitive Subscription
      Documents.

4.    There shall not have occurred or be in existence any fact, event or
      circumstance at any time since December 31, 2003, or any change in any
      event, fact or circumstance in existence at or before that date, which
      individually or in the aggregate with all other facts, events or
      circumstances, has had or is reasonably likely to have a Material Adverse
      Effect.

5.    All Regulatory Approvals required in connection with the consummation of
      the transactions contemplated in this Agreement (including the issuance of
      the North Country Shares to the Investors and the reconstitution of the
      Board of Directors of North Country and its Subsidiaries) shall have been
      obtained and shall be in full force and effect, and all applicable
      statutory waiting periods shall have expired or been terminated, in each
      case without the imposition of any Burdensome Condition.

6.    NCFC Recapitalization shall have received assurances reasonably
      satisfactory to it that upon completion of the transactions contemplated
      by this Agreement and the recapitalization of the Company and the Bank to
      the levels required by the Order, all applicable Regulatory Authorities
      will remove the Order and all other cease and desist and other orders
      against North Country and/or its banking and non-banking subsidiaries at
      the Closing, approve the transactions contemplated by this Agreement,
      determine the Bank to be well capitalized, approve a new branch in Oakland
      County, Michigan, and approve a name change for the Bank.

7.    The North Country shareholders shall have duly adopted and approved each
      of the Shareholder Approval Items.

8.    Effective upon the Closing, the names of the Bank will be changed to
      Mackinac Bank and the names of all other Subsidiaries of North Country
      will be changed to names designated by NCFC Recapitalization.

9.    Effective upon the Closing, the Board of Directors of North Country will
      be reconstituted as specified by NCFC Recapitalization and North Country
      shall have taken all required action to reconstitute the Board of
      Directors of its Subsidiaries as specified by NCFC Recapitalization,
      provided that Mr. Bess and Mr. Lindroth, two (2) current directors of
      North Country, shall continue as directors of North Country following the
      Closing.

10.   The Board of Directors of North Country shall have duly taken all
      necessary steps to terminate the Rights Agreement effective prior to or
      upon the Closing, and no Rights shall thereafter be issued or outstanding,
      and no Person shall have become an "Acquiring Person" and there shall not
      have occurred any Share Acquisition Date or Distribution Date.

<PAGE>

11.   The North Country Shares to be issued to the Investors shall have been
      listed on the NASDAQ SmallCap Market, subject to official notice of
      issuance.

12.   All material litigation involving North Country, any of its subsidiaries,
      and/or any of their directors or officers (in such capacities) shall have
      been finally settled on terms reasonably acceptable to NCFC
      Recapitalization (including the Identified Claims).

13.   The Registration Rights Agreement shall be in full force and effect.

14.   Employment Agreements shall be in full force and effect.

15.   North Country shall have duly amended the North Country Stock Option Plans
      to increase the number of shares that may be subject to awards made at or
      after the Closing under the plan to 12.5% of the total number of shares
      outstanding after the Closing Date. The number of shares to be subject to
      each plan is to be determined by NCFC Recapitalization prior to the
      Closing. The 2000 Stock Incentive Plan will be further amended to permit
      the options to be awarded as contemplated under certain of the Employment
      Agreements (see Schedule 5) to be priced at the per share price in the
      Offering and to continue to vest and be exercisable notwithstanding
      termination of the Employment Agreements as contemplated in the
      agreements.

16.   No order, injunction or decree issued by any Regulatory Authority or court
      of competent jurisdiction or other legal restraint or prohibition
      preventing the consummation of the transactions contemplated by this
      Agreement shall be in effect. No statute, rule, regulation, order,
      injunction or decree shall have been enacted, entered, promulgated or
      enforced by any Regulatory Authority or court which prohibits or makes
      illegal any of the transactions contemplated by this Agreement.

17.   North Country shall have redeemed and retired all of its outstanding
      subordinated debentures issued to North Country Capital Trust, North
      Country Capital Trust shall have redeemed and retired all of the trust
      preferred securities issued by it, North Country and North Country Capital
      Trust shall have been released and discharged from all guarantees and
      obligations under all agreements with and for the benefit of North Country
      Capital Trust or the holders of any of its trust preferred securities, and
      from all unpaid principal, interest, fees, charges or other amounts, in
      each case at a substantial discount from par and on other terms and
      conditions agreed upon by NCFC Recapitalization and set forth in the
      Definitive Subscription Documents.

18.   NCFC Recapitalization shall have completed such reviews of North Country
      and its Subsidiaries, and on the Disclosure Schedule and items disclosed
      therein, as it deems appropriate under the circumstances and such reviews
      shall be satisfactory to them.

19.   All other conditions set forth in the Definitive Subscription Documents
      shall have been satisfied.

20.   C. James Bess and any other "disqualified individual" with any agreement
      or arrangement that shall involve any "parachute payment" by North Country
      or any Subsidiary as a result of any of the transactions contemplated by
      this Agreement shall have agreed in writing to such amendment to any such
      agreement or arrangement as may be necessary so that any such payment
      shall not include any "excess parachute payment" and no part of any such
      payment shall not be deductible under Section 280G of the Code or subject
      to any excise tax under Section 4999 of the Code, and any such amendment
      shall be on terms acceptable to NCFC Recapitalization.

21.   North Country shall have obtained director and officer liability insurance
      in an amount, on terms and conditions, and from an insurance company
      acceptable to NCFC Recapitalization.

22.   Receipt of an opinion of counsel for North Country in form and content
      reasonably satisfactory to NCFC Acquisition and the Placement Agents.

<PAGE>

23.   Investors shall have submitted Definitive Subscription Agreements that
      have been accepted by North Country by the Closing Deadline representing
      not less than an aggregate of $30 million in subscriptions.

24.   Receipt of a certificate from an appropriate officer or officers of North
      Country confirming the satisfaction of the Investors' Closing Conditions
      set forth in this Part I.

25.   North Country's stockholders equity, determined in accordance with
      generally accepted accounting principles, consistently applied, shall
      exceed $3 million at all times prior to the Closing.

26.   North Country's loan and lease loss reserves, determined in accordance
      with current practices, shall equal or exceed the greater of 4% of total
      loans or $10,000,000 at all times prior to the Closing.

27.   NCFC shall have received the Closing Schedule, including the computation
      of the Pre-Closing Adjusted Equity, as contemplated in Section 4.5, and
      all disagreements with respect to the closing schedule and the
      computations shall have been finally resolved as provided in Section 4.5.

Part II: North Country's Closing Conditions.

1.    All Regulatory Approvals required in connection with the consummation of
      the transactions contemplated in this Agreement (including the issuance of
      the North Country Shares to the Investors and the reconstitution of the
      Board of Directors of North Country and its subsidiaries) shall have been
      obtained and shall be in full force and effect, and all applicable
      statutory waiting periods shall have expired or been terminated.

2.    The North Country shareholders shall have duly adopted and approved each
      of the Shareholder Approved Items.

3.    The North Country Shares to be issued to the Investors shall have been
      admitted for quotation on the NASDAQ SmallCap Market, subject to official
      notice of issuance.

4.    No order, injunction or decree issued by any Regulatory Authority or court
      of competent jurisdiction or other legal restraint or prohibition
      preventing the consummation of the transactions contemplated by this
      Agreement shall be in effect. No statute, rule, regulation, order,
      injunction or decree shall have been enacted, entered, promulgated or
      enforced by any Regulatory Authority or court which prohibits or makes
      illegal any of the transactions contemplated by this Agreement.

5.    Investors shall have submitted Definitive Subscription Documents to the
      Placement Agents or North Country by the Closing Deadline representing not
      less than an aggregate of $30 million in subscriptions.
<PAGE>

                                   Schedule 4

                          Registration Rights Agreement

                                  See Attached

                                       4-1

<PAGE>

                          REGISTRATION RIGHTS AGREEMENT

      THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
September_________, 2004, between North Country Financial Corporation, a
Michigan corporation (the "Company"), and each of the Persons who have executed
this Agreement and are named in Annex A hereto (each, an "Investor" and,
collectively, the "Investors").

      Execution and delivery of this Agreement by the parties hereto are
conditions to each Investor purchasing Shares (as defined below) from the
Company under the Subscription Agreement (as defined below). Accordingly, the
parties hereto hereby agree as follows:

      SECTION 1. DEFINITIONS. Unless the context otherwise requires, the terms
defined in this Section 1 have the meanings herein specified for all purposes of
this Agreement, applicable to both the singular and plural forms of such terms:

      "Board" means the Board of Directors of the Company.

      "Closing Date" has the meaning given in the Subscription Agreement;
provided that if there is more than one Closing Date pursuant to the
Subscription Agreement, this term shall refer to the latest such Closing Date.

      "Common Stock" means the common stock, no par value of the Company.

      "Commission" means the Securities and Exchange Commission.

      "Exchange Act" means the Securities Exchange Act of 1934, as amended.

      "Holder" means the record owner of Registrable Securities.

      "Person" means any natural person, corporation, trust, association,
limited liability company, partnership, joint venture or other entity and any
government, governmental agency, instrumentality or political subdivision.

      "Register," "registered" and "registration" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of the effectiveness of such
registration statement.

      "Registrable Securities" means the Shares and any shares of capital stock
issued or issuable from time to time as a dividend or other distribution with
respect to, or in exchange for or in replacement of, the Shares if and so long
as: (i) they have not been sold to or through a broker or dealer or underwriter
in a public distribution or a public securities transaction; or (ii) they have
not been sold in a transaction exempt from the registration and prospectus
delivery requirements of the Securities Act under Section 4(1) thereof so that
all transfer restrictions and restrictive legends with respect to such Shares
are removed upon the consummation of such sale; or (iii) they could not be sold
without registration by any Holder thereof pursuant to Rule 144 promulgated
under the Securities Act.

      "Securities Act" means the Securities Act of 1933, as amended.

REGISTRATION RIGHTS AGREEMENT FOR NEW INVESTORS (2)

<PAGE>

      "Shares" means the shares of Common Stock sold and issued to the
Investors pursuant to the Subscription Agreement.

      "Subscription Agreement" means one or more Subscription Agreements of even
date herewith between the Company and each Investor relating to the purchase and
sale of the Shares.

      SECTION 2. REQUIRED REGISTRATION.

            (a)   Subject to the receipt of all necessary information from the
Investors, the Company shall use commercially reasonable efforts to prepare and
file a registration statement on Form S-3 under the Securities Act covering the
Registrable Securities (the "Registration Statement"), on or before the date
that is ninety (90) days after the Closing Date (the "Filing Date"), and shall
use its commercially reasonable efforts to cause such Registration Statement to
become effective as soon as practicable after filing, and in any event no later
than March 31, 2005 (the "Effectiveness Date"); provided, however, that if the
Company receives notification from the SEC that the Registration Statement will
receive no action or review from the SEC, then the Company will, subject to its
rights under Section 2(d) below, cause the Registration Statement to become
effective within five business days after such SEC notification. Notwithstanding
the foregoing, if Form S-3 is not available for use by the Company, then the
Company will file a Registration Statement on such form as is then available to
effect a registration of the Registrable Securities, subject to the consent of
the Holders of a majority of the Registrable Securities then outstanding, which
consent will not be unreasonably withheld or delayed.

            (b)   The Company shall use its commercially reasonable efforts to
maintain the effectiveness of the Registration Statement under the Securities
Act until the earliest of: (i) the date that is two years after the Closing
Date; and (ii) the date on which all of the Registrable Securities have been
sold pursuant to the Registration Statement or no longer constitute Registrable
Securities (the "Registration Period").

            (c)   Notwithstanding the foregoing, if the Company is engaged in
any activity or transaction or preparations or negotiations for any activity or
transaction that the Company desires to keep confidential for business reasons
and the Company determines in good faith that the public disclosure requirements
imposed on the Company under the Securities Act in connection with a
registration hereunder would require disclosure of such activity, transaction,
preparation or negotiations and that such disclosure would be seriously
detrimental to the Company, the Company shall have the right, by written notice
to the Holders: (i) to withdraw a registration statement after filing and after
such notice, but prior to the effectiveness thereof; or (ii) suspend the
effectiveness thereof for a period not to exceed 90 days; provided that such
right may not be exercised more than once in any twelve-month period.

      SECTION 3. PIGGY-BACK REGISTRATION.

            (a)   If, at any time prior to the expiration of the Registration
Period a Registration Statement is not effective with respect to all of the
Shares, each time the Company determines to file a registration statement under
the Securities Act (other than pursuant to Section 2 hereof and other than a
registration statement on Form S-4 or Form S-8 or a

REGISTRATION RIGHTS AGREEMENT FOR NEW INVESTORS (2)

                                       2

<PAGE>


registration statement on Form S-1 covering solely an employee benefit plan) in
connection with the proposed offer and sale for money of any of its securities,
either for its own account or on behalf of any other security holder, it will
give prompt written notice of its determination to all Holders of Registrable
Securities. Upon the written request of a Holder of Registrable Securities given
within 20 days after the receipt of such written notice, the Company will use
commercially reasonable efforts to cause all such Registrable Securities, the
Holders of which have so requested registration, to be included in such
registration statement and registered under the Securities Act, all to the
extent requisite to permit the sale or other disposition by the prospective
seller or sellers of the Registrable Securities to be so registered.

            (b)   If the registration of which the Company gives written notice
pursuant to Section 3(a) is for a public offering involving an underwriting, the
Company will so advise the Holders as a part of its written notice. In such
event, the right of any Holder to registration pursuant to this Section 3 is
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute their Registrable
Securities through such underwriting shall enter into an underwriting agreement
with the underwriter or underwriters selected for such underwriting by the
Company, along with the Company and the other holders distributing their
securities through such underwriting; provided, that such underwriting agreement
is in customary form and is reasonably acceptable to the Holders of a majority
of the Registrable Securities requesting to be included in such registration.

            (c)   Notwithstanding any other provision of this Section 3, if the
managing underwriter of an underwritten distribution advises the Company and the
Holders of the Registrable Securities participating in such registration in
writing that in its good faith judgment the number of shares of Registrable
Securities and the other securities requested to be registered exceeds the
number of shares of Registrable Securities and other securities which can be
sold in such offering, then: (i) the number of shares of Registrable Securities
and other securities so requested to be included in the offering will be reduced
to that number of shares which in the good faith judgment of the managing
underwriter can be sold in such offering (except for shares to be issued by the
Company in an offering initiated by the Company, which will have priority over
the shares of Registrable Securities); and (ii) subject to existing priority
rights of the holders of such other securities, such reduced number of shares
will be allocated among all participating Holders of Registrable Securities and
the holders of other securities in proportion, as nearly as practicable, to the
respective number of shares of Registrable Securities and other securities held
by such Holders and other holders at the time of filing the registration
statement in relation to the total number of shares of Common Stock outstanding
on a fully diluted basis. All Registrable Securities which are excluded from the
underwriting by reason of the underwriter's marketing limitation and all other
Registrable Securities not originally requested to be so included will not be
included in such registration and will be withheld from the market by the
Holders thereof for a period, not to exceed 180 days, which the managing
underwriter reasonably determines is necessary to effect the underwritten public
offering.

      SECTION 4. REGISTRATION PROCEDURES. If and whenever the Company is
required by the provisions of Section 2 or 3 hereof to effect the registration
of Registrable Securities under the Securities Act, the Company will:

REGISTRATION RIGHTS AGREEMENT FOR NEW INVESTORS (2)

                                       3

<PAGE>

            (a)   In accordance with the Securities Act and all applicable rules
and regulations thereunder, prepare and file with the Commission a registration
statement with respect to such securities and use its commercially reasonable
efforts to cause such registration statement to become effective, and use its
commercially reasonable efforts to cause such registration statement to remain
effective (including preparing and filing with the Commission such amendments
and supplements to such registration statement and the prospectus contained
therein as may be necessary to keep such registration statement effective) until
the securities covered by such registration statement have been sold or as
otherwise set forth in Section 2;

            (b)   If the offering is to be underwritten in whole or in part,
enter into a customary written underwriting agreement in form and substance
reasonably satisfactory to the managing underwriter of the public offering, the
Company and the Holders of a majority of the Registrable Securities
participating in such offering;

            (c)   Furnish to the Holders participating in such registration and
to the underwriters of the securities being registered such number of copies of
the registration statement and each amendment and supplement thereto,
preliminary prospectus, final prospectus and such other documents as such
underwriters and Holders may reasonably request in order to facilitate the
public offering of such securities; provided, however, that the obligation of
the Company to deliver copies of prospectuses or preliminary prospectuses to any
Holder shall be subject to the receipt by the Company of reasonable assurances
from such Holder that the Holder will comply with the applicable provisions of
the Securities Act and of such other securities or blue sky laws as may be
applicable in connection with any use of such prospectuses or preliminary
prospectuses;

            (d)   Use its commercially reasonable efforts to register or qualify
the securities covered by such registration statement under such state
securities or blue sky laws of such jurisdictions as such participating Holders
and underwriters may reasonably request within ten days prior to the original
filing of such registration statement, except that the Company will not for any
purpose be required to execute a general consent to service of process or to
qualify to do business as a foreign corporation in any jurisdiction where it is
not so qualified;

            (e)   Notify the Holders participating in such registration,
promptly after it receives notice thereof, of the date and time when such
registration statement and each post-effective amendment thereto has become
effective or a supplement to any prospectus forming a part of such registration
statement has been filed;

            (f)   Notify such Holders promptly of any request by the Commission
for the amending or supplementing of such registration statement or prospectus
or for additional information;

            (g)   Prepare and file with the Commission, promptly upon the
request of any such Holders, any amendments or supplements to such registration
statement or prospectus which, in the written opinion of counsel for such
Holders, which opinion shall be reasonably acceptable to counsel for the
Company, is required under the Securities Act or the rules and regulations of
the Commission thereunder in connection with the distribution of the Registrable
Securities by such Holders;

REGISTRATION RIGHTS AGREEMENT FOR NEW INVESTORS (2)

                                       4

<PAGE>

            (h)   Prepare and file promptly with the Commission, and promptly
notify such Holders of the filing of, such amendments or supplements to such
registration statement or prospectus as may be necessary to correct any
statements or omissions if, at the time when a prospectus relating to such
securities is required to be delivered under the Securities Act, any event has
occurred as the result of which any such prospectus or any other prospectus as
then in effect would include an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading;

            (i)   Advise such Holders, promptly after it receives notice or
obtains knowledge thereof, of the issuance of any stop order by the Commission
suspending the effectiveness of such registration statement or the initiation or
threatening of any proceeding for that purpose and promptly use its commercially
reasonable efforts to prevent the issuance of any stop order or to obtain its
withdrawal if such stop order should be issued; and

            (j)   At the request of any Holder of Registrable Securities covered
by such registration statement, furnish to such Holder on the effective date of
the registration statement or, if such registration includes an underwritten
public offering, at the closing provided for in the underwriting agreement, an
opinion dated such date of the counsel representing the Company for the purposes
of such registration, addressed to the underwriters, if any, and to the Holder
or Holders making such request, covering such matters with respect to the
registration statement, the prospectus and each amendment or supplement thereto,
proceedings under state and federal securities laws, other matters relating to
the Company, the securities being registered and the offer and sale of such
securities as are customarily the subject of opinions of issuer's counsel
provided to underwriters in underwritten public offerings; provided, however,
that such opinion shall be no more extensive than the opinion provided as
Appendix B to the Subscription Agreement.

            (k)   Provide a transfer agent and registrar, which may be a single
entity, for the Registrable Securities not later than the Effectiveness Date.

      SECTION 5. ACCURACY OF REGISTRATION STATEMENT. Subject to the Company's
rights under Section 10, any Registration Statement (including any amendments or
supplements thereto and prospectuses contained therein) filed by the Company
covering Registrable Securities will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading. Subject to the limitations set forth in Section
10, the Company will prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus used in connection with the Registration Statement as may be
necessary to permit sales pursuant to the Registration Statement at all times
during the Registration Period, and, during such period, will comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities of the Company covered by the Registration Statement
until the termination of the Registration Period, or if earlier, until such time
as all of such Registrable Securities have been disposed of in accordance with
the intended methods of disposition by the seller or sellers thereof as set
forth in the Registration Statement.

REGISTRATION RIGHTS AGREEMENT FOR NEW INVESTORS (2)

                                       5

<PAGE>

      SECTION 6. ADDITIONAL OBLIGATIONS OF THE COMPANY.

      6.1   Review by Investors. The Company will permit Barack Ferrazzano
Kirschbaum Perlman & Nagelberg LLP, to review the Registration Statement and all
amendments and supplements thereto (as well as all requests for acceleration or
effectiveness thereof) a reasonable period of time prior to their filing with
the SEC, and will not file any document in a form to which such counsel
reasonably objects, unless otherwise required by law in the opinion of the
Company's counsel. The sections of any such Registration Statement including
information with respect to the Investors, the Investors' beneficial ownership
of securities of the Company or the Investors' intended method of disposition of
Registrable Securities must conform to the information provided to the Company
by each of the Investors.

      6.2   Expenses. With respect to the registration effected pursuant to
Section 2 hereof, the Company will bear all fees, costs and expenses of and
incidental to such registration and the public offering in connection therewith;
provided, however, that the Company shall not be liable for any underwriting
discounts and commissions, which in all cases shall be born by the Holders. Such
fees, costs and expenses of registration to be born as provided in the preceding
sentence, include, without limitation, all registration, filing and NASD fees,
printing expenses, fees and disbursements of counsel and accountants for the
Company, all expenses of complying with state securities or blue sky laws of any
jurisdictions in which the securities to be offered are to be registered or
qualified and reasonable fees and disbursements (not to exceed $50,000) of one
firm of counsel for all selling security holders, selected by the Holders of a
majority of the Registrable Securities to be included in such registration, and
reasonably acceptable to the Company.

      6.3   Due Diligence. The Company will make available for inspection by any
Investor whose Registrable Securities are being sold pursuant to a Registration
Statement and one firm of attorneys retained by the Investors (collectively, the
"Inspectors"), all pertinent financial and other records, pertinent corporate
documents and properties of the Company (collectively, the "Records"), as each
Inspector reasonably deems necessary to enable the Inspector to exercise its due
diligence responsibility. The Company will cause its officers, directors and
employees to supply all information that any Inspector may reasonably request
for purposes of performing such due diligence. Each Inspector will hold in
confidence, and will not make any disclosure of, any Records or other
information that the Company determines in good faith to be confidential, and of
which determination the Inspectors are so notified, unless: (i) the disclosure
of such Records is necessary to avoid or correct a misstatement or omission in
any Registration Statement; (ii) the release of such Records is ordered pursuant
to a subpoena or other order from a court or government body of competent
jurisdiction, or (iii) the information in such Records has been made generally
available to the public other than by disclosure in violation of this or any
other agreement.

      SECTION 7. INDEMNIFICATION.

            (a)   The Company agrees to indemnify and hold harmless each Holder
of Registrable Securities which are included in a registration statement
pursuant to the provisions of this Agreement and each of such Holder's officers,
directors, partners, legal counsel and accountants, and each Person who controls
such Holder within the meaning of the Securities Act

REGISTRATION RIGHTS AGREEMENT FOR NEW INVESTORS (2)

                                       6

<PAGE>

and any underwriter (as defined in the Securities Act) for such Holder, and any
Person who controls such underwriter within the meaning of the Securities Act,
from and against, and to reimburse such Holder, its officers, directors,
partners, legal counsel, accountants and controlling Persons and each such
underwriter and controlling Person of such underwriter with respect to, any and
all claims, actions (actual or threatened), demands, losses, damages,
liabilities, costs and expenses to which such Holder, its officers, directors,
partners, legal counsel, accountants or controlling Persons or any such
underwriter or controlling Person of such underwriter may become subject under
the Securities Act or otherwise, insofar as such claims, actions, demands,
losses, damages, liabilities, costs or expenses arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in such registration statement, any prospectus contained therein, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in light of
the circumstances in which they were made; provided, however, that the Company
will not be liable in any such case to the extent that any such claim, action,
demand, loss, damage, liability, cost or expense is caused by an untrue
statement or alleged untrue statement or omission or alleged omission so made in
conformity with written information furnished by such Holder, such underwriter
or such controlling Person specifically for use in the preparation thereof.

            (b)   Each Holder of shares of Registrable Securities that are
included in a registration statement pursuant to the provisions of this
Agreement agrees, severally and not jointly, to indemnify and hold harmless the
Company, its officers, directors, legal counsel and accountants, any underwriter
and each Person who controls the Company or any underwriter within the meaning
of the Securities Act, from and against, and agrees to reimburse the Company,
its officers, directors, legal counsel, accountants and controlling Persons, any
underwriter with respect to, any and all claims, actions, demands, losses,
damages, liabilities, costs or expenses to which the Company, its officers,
directors, legal counsel, accountants, such controlling Persons, or any
underwriter may become subject under the Securities Act or otherwise, insofar as
such claims, actions, demands, losses, damages, liabilities, costs or expenses
are caused by any untrue or alleged untrue statement of any material fact
contained in such registration statement, any prospectus contained therein or
any amendment or supplement thereto, or are caused by the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading, in each case, to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was so made in reliance upon and in conformity with written
information furnished by such Holder specifically for use in the preparation
thereof. Notwithstanding the foregoing, no Holder of Registrable Securities will
be obligated hereunder to pay more than the net proceeds realized by it upon its
sale of Registrable Securities included in such registration statement.

            (c)   Promptly after receipt by a party indemnified pursuant to the
provisions of subsection (a) or (b) of this Section of notice of the
commencement of any action involving the subject matter of the foregoing
indemnity provisions, such indemnified party will, if a claim therefor is to be
made against the indemnifying party pursuant to the provisions of subsection (a)
or (b), notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section and will not relieve the indemnifying party from liability

 REGISTRATION RIGHTS AGREEMENT FOR NEW INVESTORS (2)

                                       7

<PAGE>

under this Section 6 unless such indemnifying party is prejudiced by such
omission. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying parties similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party
reasonably concludes that there may be legal defenses available to it and/or
other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties will have
the right to select separate counsel (in which case the indemnifying party will
not have the right to direct the defense of such action on behalf of the
indemnified party or parties). Upon the permitted assumption by the indemnifying
party of the defense of such action, and approval by the indemnified party of
counsel, the indemnifying party will not be liable to the indemnified party
under subsection (a) or (b) for any legal or other expenses subsequently
incurred by the indemnified party in connection with the defense thereof (other
than reasonable costs of investigation) unless: (i) the indemnified party has
employed separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence; (ii) the
indemnifying party has employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time; (iii) the indemnifying
party and its counsel fail actively and vigorously to pursue the defense of the
action; or (iv) the indemnifying party authorizes the employment of counsel for
the indemnified party at the expense of the indemnifying party. No indemnifying
party will be liable to an indemnified party for any settlement of any action or
claim without the consent of the indemnifying party, and no indemnifying party
may unreasonably withhold its consent to any such settlement. No indemnifying
party will consent to entry of any judgment or enter into any settlement which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to the indemnified party of a release from all liability with respect
to such claim or litigation.

            (d)   If the indemnification provided for in subsection (a) or (b)
of this Section is held by a court of competent jurisdiction to be unavailable
to a party to be indemnified with respect to any claims, actions, demands,
losses, damages, liabilities, costs or expenses referred to therein, then each
indemnifying party under any such subsection, in lieu of indemnifying such
indemnified party thereunder, agrees to contribute to the amount paid or payable
by such indemnified party as a result of such claims, actions, demands, losses,
damages, liabilities, costs or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand and of the
indemnified party on the other in connection with the statements or omissions
which resulted in such claims, actions, demands, losses, damages, liabilities,
costs or expenses, as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of the indemnified party will be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the indemnifying party or by
the indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
Notwithstanding the foregoing, the amount any Holder of Registrable Securities
will be obligated to contribute pursuant to this subsection will be limited to
an amount equal to the per share public offering price (less any underwriting
discount and commissions) multiplied by the number of shares of Registrable
Securities sold by such Holder pursuant to the registration statement which
gives rise to such

REGISTRATION RIGHTS AGREEMENT FOR NEW INVESTORS (2)

                                       8

<PAGE>

obligation to contribute (less the aggregate amount of any damages which such
Holder has otherwise been required to pay in respect of such claim, action,
demand, loss, damage, liability, cost or expense or any substantially similar
claim, action, demand, loss, damage, liability, cost or expense arising from the
sale of such Registrable Securities). No person guilty of fraudulent
misrepresentation (within the meaning of Section ll(f) of the Securities Act)
will be entitled to contribution hereunder from any person who was not guilty of
such fraudulent misrepresentation.

      SECTION 8. REPORTING REQUIREMENTS UNDER EXCHANGE ACT. The Company will
maintain the effectiveness of its registration under Section 12 of the Exchange
Act and timely file (whether or not it is then required to do so) such
information, documents and reports as the Commission may require or prescribe
under Section 15(d) of the Exchange Act. The Company will, forthwith upon
written request, furnish to any Holder of Registrable Securities a written
statement by the Company that it has complied with such reporting requirements.
In addition, the Company will take such other measures and file such other
information, documents and reports, as may be required of it hereafter by the
Commission as a condition to the availability of Rule 144 under the Securities
Act (or any similar exemptive provision hereafter in effect).

      SECTION 9. HOLDER INFORMATION. The rights of each Holder of Registrable
Securities to participate in any registration to be effected pursuant to this
Agreement is subject to such Holder furnishing the Company with such information
with respect to such Holder and the distribution of such Registrable Securities
as the Company may from time to time reasonably request and as may be required
by law or by the Commission in connection therewith, and each Holder of
Registrable Securities as to which any registration is to be effected pursuant
to this Agreement shall furnish the Company with such information.

      SECTION 10. SUSPENSION OF SALES. Upon receipt of written notice from the
Company that a registration statement or prospectus contains an untrue statement
of a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading (a
"Misstatement"), each Holder of Registrable Securities shall forthwith
discontinue disposition of Registrable Securities until such Holder has received
copies of the supplemented or amended prospectus that corrects such
Misstatement, or until such Holder is advised in writing by the Company that the
use of the prospectus may be resumed, and, if so directed by the Company, such
Holder shall deliver to the Company (at the Company's expense) all copies, other
than permanent file copies then in such Holder's possession, of the prospectus
covering such Registrable Securities current at the time of receipt of such
notice.

      SECTION 11. FORMS. All references in this Agreement to particular forms of
registration statements are intended to include, and will be deemed to include,
references to all successor forms which are intended to replace, or to apply to
similar transactions as, the forms herein referenced.

      SECTION 12. MISCELLANEOUS.

      12.1  Waivers and Amendments. With the written consent of the Holders of a
majority of the Registrable Securities then outstanding, the obligations of the
Company and the rights of the Holders under this Agreement may be waived (either
generally or in a particular instance, either retroactively or prospectively and
either for a specified period of time or indefinitely), and

REGISTRATION RIGHTS AGREEMENT FOR NEW INVESTORS (2)

                                       9

<PAGE>

with the same consent the Company may enter into a supplementary agreement for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or of any supplemental agreement or
modifying in any manner the rights and obligations hereunder of the Holders and
the Company; provided, however, that no such waiver or supplemental agreement
may reduce the aforesaid proportion of Registrable Securities, the Holders of
which are required to consent to any waiver or supplemental agreement, without
the consent of the Holders of all the Registrable Securities; and provided
further, and notwithstanding any provision herein to the contrary, that any such
waiver amendment or supplement that applies only to a particular registration
shall require only the written consent of the Holders of a majority of the
Registrable Securities included in such registration. Upon the effectuation of
each such waiver, consent or agreement of amendment or modification, the Company
will give prompt written notice thereof to the Holders of the Registrable
Securities who have not previously consented thereto in writing. Neither this
Agreement nor any provision hereof may be changed, waived, discharged or
terminated orally or by course of dealing, but only by a statement in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought, except to the extent provided in this Section 12.1.
Specifically, but without limiting the generality of the foregoing, the failure
of any Investor at any time or times to require performance of any provision
hereof by the Company will not affect the right of any Investor at a later time
to enforce the same. No waiver by any party of the breach of any term or
provision contained in this Agreement, in any one or more instances, will be
deemed to be, or construed as, a further or continuing waiver of any such
breach, or a waiver of the breach of any other term or covenant contained in
this Agreement.

      12.2  Effect of Waiver or Amendment. Each Investor acknowledges that by
operation of Section 12.1 the Holders of a majority of the Registrable
Securities will, subject to the limitations contained in Section 12.1, have the
right and power to diminish or eliminate certain rights of such Investor under
this Agreement.

      12.3  Rights of Investors Inter Se. Each Investor has the absolute right
to exercise or refrain from exercising any right or rights which such Investor
may have by reason of this Agreement or any Registrable Security, including,
without limitation, the right to consent to the waiver of any obligation of the
Company under this Agreement and to enter into an agreement with the Company for
the purpose of modifying this Agreement or any agreement effecting any such
modification, and such Investor will not incur any liability to any other
Investor or Investors with respect to exercising or refraining from exercising
any such right or rights.

      12.4  Notices. All notices, requests, consents and other communications
required or permitted hereunder will be in writing and will be delivered, or
mailed first class postage prepaid, registered or certified mail,

            (a)   If to any Investor, addressed to such Investor at its address
shown on Annex A hereto, or at such other address as such Investor may specify
by written notice to the Company; or

            (b)   If to the Company, at 130 South Cedar Street, Manistique,
Michigan 49854, or at such other address as the Company may specify by written
notice to the Investors;

REGISTRATION RIGHTS AGREEMENT FOR NEW INVESTORS (2)

                                       10

<PAGE>

and each such notice, request, consent and other communication will for all
purposes of this Agreement be treated as being effective or having been given
when delivered, if delivered personally, or, if sent by mail, at the earlier of
its actual receipt or three days after the same has been deposited in a
regularly maintained receptacle for the deposit of United States mail, addressed
and postage prepaid as aforesaid.

      12.5  Severability. If any one or more of the provisions of this Agreement
or of any agreement entered into pursuant to this Agreement is determined to be
illegal or unenforceable, it is the intention of the parties hereto that all
other provisions of this Agreement and of each other agreement entered into
pursuant to this Agreement should be given effect separately from the provision
or provisions determined to be illegal or unenforceable and not be affected
thereby.

      12.6  Parties in Interest. All the terms and provisions of this Agreement
will be binding upon and inure to the benefit of and be enforceable by the
respective successors and assigns of the parties hereto, whether so expressed or
not and, in particular, will inure to the benefit of and be enforceable by the
Holder or Holders at the time of any registration of Registrable Securities.
Subject to the immediately preceding sentence, this Agreement will not run to
the benefit of or be enforceable by any Person other than a party to this
Agreement and its successors and assigns.

      12.7  Headings. The headings of the sections, subsections and paragraphs
of this Agreement have been inserted for convenience of reference only and do
not constitute a part of this Agreement.

      12.8  Entire Agreement. This Agreement constitutes the entire
understanding of the parties hereto and supersedes all prior understanding among
such parties.

      12.9  Choice of Lave. This Agreement and any and all matters related to or
arising under this Agreement shall be governed by the internal laws of the State
of Michigan, regardless of any provisions on choice of or conflicts of law.

      12.10 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, with the
same effect as if all parties had signed the same document. All such
counterparts will be deemed an original, will be construed together and will
constitute one and the same instrument.

      12.11 Assignment of Registration Rights. The rights of the Investors
hereunder, including the right to have the Company register Registrable
Securities pursuant to this Agreement, will be automatically assigned by the
Investors to transferees or assignees of all or any portion of the Registrable
Securities, but only if: (a) the Investor agrees in writing with the transferee
or assignee to assign such rights, and a copy of such agreement is furnished to
the Company within a reasonable time after such assignment; (b) the Company is,
within a reasonable time after such transfer or assignment, furnished with
written notice of the name and address of such transferee or assignee and the
securities with respect to which such registration rights are being transferred
or assigned; (c) after such transfer or assignment the further disposition of
such securities by the transferee or assignee is restricted under the Securities
Act and applicable state securities laws; (d) at or before the time the Company
received the written

REGISTRATION RIGHTS AGREEMENT FOR NEW INVESTORS (2)

                                       11

<PAGE>

notice contemplated by clause (b) of this sentence, the transferee or assignee
agrees in writing with the Company to be bound by all of the provisions
contained herein; and (e) the transferee is an "accredited investor" or a
"qualified institutional buyer," as each such term is defined, respectively, in
Rule 501 of Regulation D and Rule 144A, both promulgated under the Securities
Act.

                            (Signature page follows)

REGISTRATION RIGHTS AGREEMENT FOR NEW INVESTORS (2)

                                       12

<PAGE>

      IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed personally or by a duly authorized representative thereof as of
the day and year first above written.

NORTH COUNTRY FINANCIAL CORPORATION       ______________________________________
                                                Printed Name of Investor

By: ___________________________________   By: __________________________________
    Name: ___________________________         Name: ____________________________
    Title: __________________________         Title: ___________________________

REGISTRATION RIGHTS AGREEMENT FOR NEW INVESTORS (2)

                                       13

<PAGE>

                                    ANNEX A

REGISTRATION RIGHTS AGREEMENT FOR NEW INVESTORS (2)

<PAGE>

                                  Schedule 5-1

                          Employment Agreement - Stark

                                  See attached

                                       6-

<PAGE>

                              EMPLOYMENT AGREEMENT

                                (ELIOT R. STARK)

      This Agreement, dated as of the 10th day of August, 2004, by and among
NORTH COUNTRY FINANCIAL CORPORATION, a Michigan corporation (the "Company"), and
ELIOT R. STARK ("Executive")

                                   WITNESSETH:

      WHEREAS, the Company desires to engage the services of Executive, and
Executive is willing to accept such employment, on the terms and conditions set
forth herein.

      NOW, THEREFORE, in consideration of the premises and the mutual
undertakings set forth herein the parties hereto agree as follows:

      1.    Employment and Duties; Board Appointment. In accordance with actions
taken and authorized by the Board of Directors of the Company (the "Company
Board"), effective upon the Closing of the transactions provided for in the
Stock Purchase Agreement dated August 10, 2004 between the Company and NCFC
Recapitalization, LLC (the "Effective Date") Executive shall become employed and
appointed as the Executive Vice President and Chief Financial Officer of the
Company and the Bank and shall have the duties and responsibilities commensurate
with such titles and offices, including, without limitation, all such duties and
responsibilities as now are or hereafter may be set forth with respect to such
offices in the bylaws of the Company. In the event, for whatever reason,
Executive is not elected by the Company's shareholders to the Company Board
prior to the Effective Date, then as promptly as practicable following the
Effective Date, the Company Board shall take necessary and appropriate action to
appoint Executive as a director of the Company and the Bank. During the period
of his employment hereunder, Executive also shall serve as an officer of such
other

<PAGE>

affiliates of the Company and in such other capacities as he may be requested by
the Company Board and shall assume such additional duties and responsibilities
as from time to time may be assigned to him by the Company Board, all without
additional compensation therefor. Excluding any periods of vacation (not less
than 6 weeks per year) and sick leave to which the Executive is entitled, the
Executive agrees to devote his primary attention and time during normal business
hours to the business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder, to use the
Executive's reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period, it shall not be a violation of
this Agreement for the Executive to (a) serve on corporate, civic or charitable
boards or committees, (b) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (c) own, operate and manage investments or
businesses other than banking institutions, including Mackinac Partners, LLC, so
long as such activities do not interfere with the performance of the Executive's
primary responsibilities as an executive of the Company in accordance with this
Agreement. It is expressly understood and agreed that, to the extent that any
such activities have been conducted by Executive prior to the Effective Date,
the continued conduct of such activities (or the conduct of activities similar
in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the Executive's
responsibilities to the Company.

      2.    Term of Employment. The "Employment Period" of Executive hereunder
shall commence on the Effective Date and shall continue thereafter through the
third (3rd) anniversary of the Effective Date; provided, however, that,
commencing on the date one year after the Effective Date, and on each annual
anniversary of such date (such date and each annual anniversary thereof, the
"Renewal Date"), unless previously terminated, the Employment Period

                                      -2-

<PAGE>

shall be automatically extended so as to terminate three (3) years from such
Renewal Date, unless, at least 60 days prior to the Renewal Date, the Company
shall give notice to the Executive that the Employment Period shall not be so
extended. The Company shall employ Executive in accordance with this Agreement
for the Employment Period, unless Executive's employment is terminated sooner as
provided herein.

      3.    Compensation and Benefits.

            a.    During the Employment Period, the Company shall pay Executive
                  a salary (the "Base Salary") at the rate herein provided,
                  payable in arrears in accordance with the Company's normal
                  payroll payment schedule for salaried employees, but not less
                  often than monthly. Such payments of Base Salary shall be
                  subject to all withholding with respect thereto as is required
                  by applicable tax law, but shall otherwise be paid without
                  deduction, offset or counterclaim unless Executive shall
                  otherwise agree. The Base Salary shall initially be a the rate
                  of $200,000 per year, but may be increased from time to time
                  by the Company Board; and, upon the effectiveness of any such
                  increase, such increased rate of salary shall become the "Base
                  Salary" hereunder. In no event shall Executive's Base Salary
                  in effect and any time during the Employment Period be reduced
                  without Executive's consent.

            b.    After the Effective Date, but prior to March 31, 2005, the
                  Company and Executive shall develop and implement an incentive
                  plan or plans ("Incentive Plan(s)"), pursuant to which annual
                  cash awards ("Bonus") may be earned by and paid to eligible
                  employees (including Executive). In addition to Executive's
                  Base Salary, Executive shall be entitled to receive an annual
                  bonus in cash in accordance with such Incentive Plan(s),
                  except that his Bonus for 2005 shall not be less than $25,000
                  and shall be paid no later than the first anniversary of the
                  Effective Date, regardless of when such Incentive Plan(s) are
                  put into effect.

            c.    In addition to the Base Salary and Bonus, Executive shall
                  receive such Additional Benefits as may be provided for him or
                  to which he may become entitled from time to time, and nothing
                  in this Agreement shall diminish any existing or future rights
                  which Executive may have as to any Additional Benefits;
                  provided, that the Company shall provide Executive, during the
                  Employment Period, at least substantially all Additional
                  Benefits which it generally provides at the time to its other
                  management employees holding positions of comparable
                  responsibility.

            d.    The Company shall reimburse Executive for all reasonable
                  out-of-pocket expenses incurred by him in connection with his
                  employment in accordance with the Company's expense
                  reimbursement policies and procedures from time to time in
                  effect and applicable to management employees. Such
                  reimbursement shall include (i) a car allowance of $750 per
                  month; (ii) a per diem reimbursement to

                                      -3-

<PAGE>

                  Executive for each day he is in Manistique, Michigan during
                  the term of this Agreement to cover Executive's living
                  expenses, in the amount of at least One Hundred Dollars
                  ($100.00) per day, not to exceed One Thousand Dollars
                  ($1,000.00) in any calendar month; subject, however, to upward
                  adjustment in the event Executive demonstrates his reasonable
                  ordinary living expenses, including housing and meals, exceeds
                  such per diem amount.

            e.    During the Employment Period, and unless and until the Company
                  shall provide Executive with an office and support staff in
                  Oakland County, Michigan for his principal office, the Company
                  shall pay the reasonable costs of the office in Oakland County
                  and personal secretarial and other assistance presently
                  maintained by him.

      4.    Stock Options. As evidenced by a Stock Option Agreement to be
entered into between Executive and the Company (the "Option Agreement"), on the
Effective Date Executive shall be granted under the Company's 2000 Stock
Incentive Plan (the "Plan") so-called non-qualified stock options to purchase an
aggregate of 25% of the Option Pool of the Company at a price per share equal to
the price paid by Investors under the Stock Purchase Agreement and such other
terms and conditions specified in the Option Agreement. The Option Agreement
shall provide that if this Agreement is terminated other than pursuant to
Section 5.b. (death) or 5.d. (Cause), all such options (vested and unvested)
shall continue and may be exercised by Executive in accordance with their terms
as if this Agreement (and Executive's employment with the Company) had not
terminated. If this Agreement is terminated pursuant to Section 5.b. or 5.d.,
the options shall continue and shall be exercisable as provided in the Option
Agreement and the Plan.

      5.    Termination of Employment. Executive's employment hereunder shall
continue until the first to occur during the Employment Period of the following
(the "Termination Date"):

            a.    That date specified in a written notice of termination (i)
                  given by the Company to the Executive if such termination by
                  the Company is other than for Cause or Disability, or (ii)
                  given by the Executive if the Termination is for Good Reason;
                  or

            b.    The date of Executive's death; or

                                      -4-

<PAGE>

         c. That date, after the occurrence of Executive's Disability, specified
            in a written notice of termination given by the Company on or prior
            to such date; or

         d. Provided Cause actually exists, the date on which the Company gives
            Executive written notice of termination for Cause; or

         e. Following the Change of Control, either (i) the date on which
            Executive gives the Company written notice of termination for Good
            Reason; or (ii) the date on which the Company terminates Executive's
            employment hereunder otherwise than (A) for Cause pursuant to clause
            (d) or (B) by reason of Executive's Disability pursuant to clause
            (c); or

         f. After a Change in Control occurs, that date specified in a written
            notice of termination without Good Reason given by Executive to the
            Company, provided such notice is given within one year after the
            occurrence of such Change in Control; or

         g. Such other Termination Date to which the Company and Executive may
            mutually agree in writing.

      6.    Termination Payments. Upon the Termination Date under the
circumstances described below, but in any event subject to Section 7 hereof,
Executive shall be entitled to receive from the Company, and the Company shall
be obligated to pay to Executive (or Executive's Beneficiary, as the case may
be), the payments (the "Termination Payments") described below (subject to
adjustment as provided in Section 7), in addition to all Base Salary, Bonus and
expense reimbursement theretofore accrued and otherwise payable to Executive,
without deduction, offset or counterclaim (other than such withholding with
respect thereto as is required by applicable law):

         a. If the Termination Date is determined pursuant to Section 5(d)
            (i.e., by the Company for Cause), then no Termination Payments shall
            be payable.

         b. If the Termination Date is determined pursuant to Section 5(a) (i.e.
            by the Company without Cause and not due to Executive's Disability),
            then for a period equal to three (3) years after the Termination
            Date, the Company shall pay to Executive (or Executive's Beneficiary
            if Executive shall die during such three-year period), (i) at the
            times at which Executive's Base Salary would have been payable had
            his employment continued during such period amounts equal to the
            Base Salary in effect on the Termination Date; and (ii) at the times
            Bonuses are to be paid under the Incentive Plan(s) or otherwise, a
            Bonus equal to the highest

                                      -5-
<PAGE>
            Bonus or Bonuses awarded to Executive during any fiscal year of the
            Company, including the fiscal year in which the Termination Date
            occurs. In addition, for the same three (3) year period plus the
            Company shall continue benefits to Executive and Executive's family
            at least equal to those described in Clauses (b) and (c) of the
            definition of "Additional Benefits" and provided to Executive as of
            the Termination Date.

      c.    If the Termination Date is determined pursuant to Section 5(b)
            (i.e., by reason of Executive's death), then for a period of one (1)
            year following the Termination Date the Company shall pay to
            Executive's Beneficiary, at the times at which Executive's Base
            Salary would have been payable had his employment continued during
            such period, amounts equal to the Base Salary (as in effect on the
            Termination Date) which would have been payable during such period
            and shall continue for the same period benefits to Executive and
            Executive's family at least equal to those described in Clauses (b)
            and (c) of the definition of "Additional Benefits" and provided to
            Executive as of the Termination Date.

      d.    If the Termination Date is determined pursuant to Section 5(c)
            (i.e., by reason of Executive's Disability), then for a period of
            two (2) years following the Termination Date the Company shall pay
            to Executive (or, if Executive shall die during such two-year
            period, then to Executive's Beneficiary), at the times at which
            Executive's Base Salary would have been payable had the his
            employment continued during such period, amounts equal to the Base
            Salary (as in effect on the Termination Date) which would have been
            payable during such period and shall continue for the same period
            benefits to Executive and Executive's family at least equal to those
            described in Clauses (b) and (c) of the definition of "Additional
            Benefits" and provided to Executive as of the Termination Date. The
            amount of Base Salary payable to Executive under this Section 6.d.
            may be reduced by the amounts actually received by Executive under
            any long term disability insurance policy obtained and paid for by
            the Company.

      e.    If the Termination Date is determined pursuant to Section 5(e) (i.e.
            following a Change of Control, by Executive for Good Reason or by
            the Company without Cause and not due to Executive's Disability),
            then within ten (10) days after the Termination Date the Company
            shall pay to Executive in cash or equivalent a lump sum Termination
            Payment equal to 300% of the aggregate of (i) Executive's annual
            Base Salary in effect on the Termination Date; and (ii) the highest
            Bonus or Bonuses awarded to Executive during any fiscal year of the
            Company, including the fiscal year in which the Termination Date
            occurs. In addition, for the period of three (3) years after the
            Termination Date the Company shall continue benefits to Executive
            and Executive's family equal to those described in Clause (b) and
            (c) of the definition of "Additional Benefits" and provided to the
            Executive as of the Termination Date.

      f.    If the Termination Date is determined pursuant to Section 5(f)
            (i.e., by Executive after a Change of Control but without Good
            Reason), then within ten (10) days after the Termination Date the
            Company shall pay to Executive in cash or

                                      -6-
<PAGE>

            equivalent a lump sum Termination Payment equal to 100% of the
            aggregate of (i) Executive's annual Base Salary in effect on the
            Termination Date; and (ii) the highest Bonus or Bonuses awarded to
            Executive during any fiscal year of the Company, including the
            fiscal year in which the Termination Date occurs.

      g.    If the Termination Date is determined pursuant to Section 5(g)
            (i.e., by mutual written agreement), then the amount and time of
            payment of any Termination Payment, if any, in connection therewith
            shall be as determined by mutual written agreement of the Company
            and Executive.

      7.    Adjustment of Termination Payments in Certain Events. Any provisions
of Section 6 hereof to the contrary notwithstanding, if a Change of Control
shall occur pursuant to which any Termination Payments to Executive are made, or
if and to the extent that any Termination Payments are "contingent on" (within
the meaning of such phrase as used in Section 280G(b)(i) of the Code) a Change
of Control, and in either case if the "aggregate present value" (as determined
pursuant to Section 280G of the Code) of the Termination Payments payable under
Section 6, plus any other payments required to be taken into account for
purposes of clause (ii) of Section 280G(b)(2)(A) of the Code, equals or exceeds
an amount equal to 300% of the Base Amount, then the amount of such Termination
Payments shall be reduced to that amount the aggregate present value of which,
when added to that of such other payments so required to be taken into account,
is equal to 295% of the Base Amount; provided, that no such reduction shall be
made unless, within 30 days after the Termination Date, the Company and
Executive shall have received an opinion of counsel having a favorable
reputation for expertise in matters of federal taxation (who may be counsel for
the company or for Executive) to the effect that in the absence of such
reduction the payment of the termination Payments as provided in Section 7 would
more likely than not constitute a "parachute payment" within the meaning of
Section 280G(b)(2) of the Code. Any required reduction of Termination Payments
payable pursuant to Section 6(b), 6(c) or 6(d) shall be made by applying the
amount of the reduction to installments of such payments in inverse order of
their due dates.

                                       -7-

<PAGE>

      8.    Interest, Collection Costs, Etc.

      (a)   In the event that the Company shall fail to pay to executive (or
Executive's Beneficiary, as the case may be) any Base Salary or Termination
Payments when due, then (a) the Company shall pay interest on any such unpaid
amount at the Applicable Interest Rate, computed from the due date of such
payment to the date it is paid, and (b) the Company shall indemnify Executive
(or Executive's Beneficiary, as the case may be) for, and pay over to Executive
(or Executive's Beneficiary, as the case may be) on demand, all costs and
expenses (including reasonable attorneys' and consultants' fees and expenses and
court costs) incurred by Executive (or Executive's Beneficiary, as the case may
be) in connection with his efforts to collect such payments and enforce the
obligations of the Company hereunder.

      (b)   Without limiting the Company's obligations under Section 8(a), in
the event of any dispute or controversy (including as to interpretation,
enforceability, breach or default) between the Employee and the Company relating
to this Agreement, the Option Agreement, the employment relationship between the
Employee and the Company, or any other matter related hereto or thereto, the
Company shall pay and reimburse Employee, as and when incurred, all costs and
expenses (including reasonable attorneys' and consultants' fees and expenses and
all court costs) incurred by Employee in, or as a result of, the dispute or
controversy, regardless of the eventual outcome of the dispute or controversy.

      (c)   All ambiguities arising under this Agreement or the Option
Agreement, or the interpretation of this Agreement or the Option Agreement,
shall be resolved in favor of the Employee.

      9.    No Obligation to Mitigate. Executive shall not be required to
mitigate the benefits or amounts of any Termination payments provided for in
this Agreement by seeking

                                      -8-
<PAGE>

other employment or otherwise, nor shall the amount of any Termination Payment
be reduced by any compensation earned by Executive as a result of employment by
another employer after the Termination Date, or otherwise.

      10.   Certain Continuing Obligations of Employee. Throughout the period of
his employment hereunder and thereafter, Executive agrees to keep confidential
all trade secrets, customer lists, business strategies, financial and marketing
information, and other data concerning the private affairs of the Company and
the Bank or any of their affiliates, made known to or developed by Executive
during the course of his employment hereunder ("Confidential Information"), not
to use any Confidential Information or supply Confidential Information to others
other than in furtherance of the Company's or Bank's business, and to return to
the Company upon termination of his employment all copies, in whatever form, of
all Confidential Information and all other documents relating to the business of
the Company or any of its affiliates which may then be in the possession or
under the control of Employee.

      At the request of the Company Board, whether or not made during the period
of his employment hereunder, Employee agrees to execute such confidentiality
agreements, assignments of intellectual property rights, and other documents as
hereafter may be reasonably determined by the Company Board to be appropriate to
carry out the purposes of this Section.

      11.   Nonsolitiation.

      (a)   Executive agrees that, except as otherwise permitted or contemplated
by the terms hereof, he shall not engage in competitive activities (i) while
employed by the Company or the Bank; and (ii) if Executive's Termination Date is
determined under 5.a., 5.c. or 5.g. above or if the Executive terminates his
employment without Good Reason, pursuant to Section 5.f. above, during the
Restricted Period. Executive shall be deemed to engage in competitive activities
if he

                                       -9-
<PAGE>

shall, without the prior written consent of the Company, (i) within a
twenty-five (25) mile radius of the main office or any branch office of the
Bank, render services directly or indirectly, as an employee, officer, director,
consultant, advisor, partner or otherwise, for any organization or enterprise
which competes directly or indirectly with the business of Company or any of its
affiliates in providing financial products or services (including, without
limitation, banking or other services) then being offered by the Company and
such affiliates (and in the case of Executive's Termination Date being
determined under 5.a., 5.c. or 5.g., such business as of the Termination Date)
to consumers and businesses, or (ii) directly or indirectly acquires any
financial or beneficial interest in (except as provided in the next sentence)
any organization which conducts or is otherwise engaged in a business or
enterprise within a twenty-five (25) mile radius of the main office or any
branch office of the Bank, which competes directly or indirectly with the
business of the Company or the Bank or any of their affiliates in providing
financial products or services (including, without limitation, banking,
insurance or securities products or services) to consumers and businesses.
Notwithstanding the preceding sentence, Employee shall not be prohibited from
owning less than 5 percent of any publicly traded corporation whether or not
such corporation is in competition with the Company. For purposes hereof, the
term "Restricted Period" shall equal the period during which payments in full
are actually made to Executive pursuant to Section 6.b., 6.d. or 6.g. above and
in the case of a termination by the Executive without Good Reason pursuant to
section 5.f. above, one year from the effective date of the termination.

      12.   Assignment, Delegation and Assumption.

            a.    Executive may assign his rights hereunder to Executive's
                  Beneficiary effective upon Executive's death.

            b.    The Company may assign its rights and delegate its duties
                  hereunder to a Person succeeding to all or substantially all
                  of the Company's business and assets

                                      -10-
<PAGE>

            (whether by operation of law or otherwise), provided that such
            successor at the time of such succession assumes by operation of law
            or by express agreement all of the Company's obligations and duties
            hereunder; and the Company shall so assign its rights and delegate
            its duties, and cause such successor to so assume all of its duties
            and obligations hereunder, upon any transfer by the Company of all
            or substantially all of its business and assets to another Person
            (whether by operation of law or otherwise) during the Employment
            Period, as it may be extended. Notwithstanding such assignment,
            delegation and assumption, the Company shall not be released from
            its primary liability for its obligations hereunder without
            Executive's written consent.

            c.    Except as otherwise expressly provided above, neither party
                  may assign its rights or delegate its duties hereunder without
                  the written consent of the other party.

      13.   Miscellaneous.

            a.    Notices. Any notice to be given to a party in connection with
                  this Agreement shall be in writing addressed to such party at
                  such party's "Notice Address" set forth below such party's
                  signature hereto, which Notice Address may be changed from
                  time to time by such party by notice thereof to the other
                  party as herein provided. Any such notice shall be deemed
                  effectively given to a party when mailed to such party by
                  first class registered or certified United States Mail,
                  postage prepaid, addressed to such party at such party's
                  Notice Address, or, if earlier, when actually delivered to
                  such party's Notice Address directed to such party.

            b.    Integration. This Agreement constitutes the final, complete
                  and exclusive statement of the agreement between the parties
                  hereto as to the subject matter hereof, and all other prior or
                  contemporaneous oral or written agreements of the parties
                  hereto with respect to the subject matter hereof are merged
                  herein and superseded hereby.

            c.    Amendment. This Agreement may be modified or amended only by
                  express agreement of the parties in writing, assenting to such
                  modification or amendment.

            d.    Waivers. No waiver by any party of any provision hereof or
                  part thereof at any time shall constitute or evidence a waiver
                  by such party of any other provision or other part of such
                  provision or of the same provision or part at any other time.

            e.    Severability. The parties have entered into this Agreement for
                  the purposes herein expressed, with the intention that this
                  Agreement be given full effect to carry out such purposes.
                  Therefore, consistent with the effectuation of the purposes
                  hereof, the invalidity or unenforceability of any provision
                  hereof or part thereof shall not affect the validity or
                  enforceability of any other provision hereof or an other part
                  of such provision.

                                             -11-
<PAGE>

            f.    Benefits and Binding Effect. This Agreement shall inure to the
                  benefit of and be binding upon the parties hereto and their
                  respective heirs, successors, personal representatives and
                  permitted assigns.

            g.    Governing Law. The validity, construction and effect of this
                  Agreement shall be governed by the substantive laws of the
                  State of Michigan.

            h.    Headings and Captions. The headings and captions of the
                  Sections and subsections of this Agreement are for convenience
                  of reference only, and shall not affect the construction
                  hereof.

            i.    Counterparts. This Agreement may be executed by the parties in
                  multiple counterparts, each of which shall be deemed an
                  original.

            j.    Regulatory Approval. The Company and Executive agree to use
                  their respective best efforts to obtain such approval of bank
                  regulatory authorities as may be required for the payment of
                  any Termination Payments as shall be or become subject to the
                  prior approval of such regulatory authorities in accordance
                  with the provisions of any statute or regulation applicable to
                  the Company or any affiliate thereof at the time payment is to
                  be made in accordance with this Agreement.

      14.   Definitions. As used in this Agreement, the following terms have the
following respective meanings:

      "Additional Benefits" means (a) participations in bonus and incentive
compensation plans or pools, stock option, bonus, award or purchase plans,
retirement plans, and other employee benefit plans of the Company; (b) life,
health, medical, dental, accident, and other personal insurance coverage
provided by the Company for employees or their dependents; (c) directors' and
officers' liability insurance coverage provided by the Company and charter or
bylaw provisions or contracts providing for indemnification of corporate
personnel or elimination or limitation of their liabilities as such; (d) club
memberships, use of the Company automobiles, use of other Company property and
facilities and other perquisites of employment with the Company; (e) paid
vacation, leave or holidays; and (f) any and all other compensation, benefits
and perquisites of employment with the Company other than Base Salary.

      "Applicable Interest Rate" means (i) if a Change of Control shall occur
pursuant to which any payments to Executive are made, or if payment of the
amount upon which interest at such rate is computed is contingent on a Change of
Control, the rate per annum equal to 120% of the "applicable federal rate"
(determined under Section 1274(d) of the Code), compounded semiannually, or (ii)
if no Change of Control shall occur and payment of the amount upon which
interest at such rate is computed is not contingent on a Change of Control, the
greater of the rate described in clause (i) of this definition or 4% plus the
rate of interest per annum announced by Comerica Bank (or a successor to
substantially all of the commercial banking business of such bank) as its prime
rate as from time to time in effect, but (iii) in any event, not in excess of
the highest rate of interest permitted by applicable law.

                                      -12-
<PAGE>

      "Bank" means North Country Bank and Trust, a Michigan banking corporation
and a wholly-owned subsidiary of the Company.

      "Base Amount" means Executive's "base amount" as defined in Section
280G(b)(3)(A) of the Code.

      "Base Salary" means the amount per annum so designated as described in
Section 2(a) of this Agreement.

      "Cause" means: (i) the willful and continued failure of the Executive to
perform substantially the Executive's duties with the Company (other than any
such failure resulting from incapacity due to physical or mental illness or
following the Executive's delivery of a notice of termination for Good Reason),
after a written demand for substantial performance is delivered to the Executive
by the Company Board that specifically identifies the manner in which the
Company Board believes that the Executive has not substantially performed the
Executive's duties, or (ii) the willful engaging by the Executive in illegal
conduct or gross misconduct that is materially and demonstrably injurious to the
Company. No act, or failure to act, on the part of the Executive shall be
considered "willful" unless it is done, or omitted to be done, by the Executive
in bad faith or without reasonable belief that the Executive's action or
omission was in the best interests of the Company. Any act, or failure to act,
based upon authority given pursuant to a resolution duly adopted by the Company
Board or a senior officer of the Company or based upon the advice of counsel for
the Company shall be conclusively presumed to be done, or omitted to be done, by
the Executive in good faith and in the best interests of the Company. The
cessation of employment of the Executive shall not be deemed to be for Cause
unless and until there shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than three-quarters
of the entire membership of the Company Board (excluding the Executive) at a
meeting of the Board called and held for such purpose (after reasonable notice
is provided to the Executive and the Executive is given an opportunity, together
with counsel for the Executive, to be heard before the Company Board), finding
that, in the good faith opinion of the Company Board, the Executive is guilty of
the conduct described and specifying the particulars thereof in detail.

      "Change of Control" shall occur if:

      i.    Any person or group (as such terms are used in connection with
            Sections 13(d) and 14(d) of the Exchange Act) becomes the
            "beneficial owner" (as defined in Rule 13(d)(3) and 13(d)(5) under
            the Exchange Act), directly or indirectly, of securities of the
            Company representing twenty-five percent (25%) or more of the
            combined voting power of the Company's then outstanding securities;

      ii.   A merger, consolidation, sale of assets, reorganization, or proxy
            contest is consummated and, as a consequence of which, members of
            the Company Board in office immediately prior to such transaction or
            event constitute less than a majority of the Board thereafter;

                                      -13-
<PAGE>

      iii.  During any period of 24 consecutive months, individuals who at the
            beginning of such period constitute the Company Board (including for
            this purpose any new director whose election or nomination for
            election by the Company's stockholders was approved by a vote of at
            least one-half of the directors then still in office who were
            directors at the beginning of such period) cease for any reason to
            constitute at least a majority of the Company Board; or

      iv.   A merger, consolidation or reorganization is consummated with any
            other corporation pursuant to which the shareholders of the Company
            immediately prior to the merger, consolidation or reorganization do
            not immediately thereafter directly or indirectly own more than
            fifty percent (50%) of the combined voting power of the voting
            securities entitled to vote in the election of directors of the
            merged, consolidated or reorganized entity.

      Notwithstanding the foregoing, no trust department or designated fiduciary
      or other trustee of such trust department of the Company or a subsidiary
      of the Company, or other similar fiduciary capacity of the Company with
      direct voting control of the stock shall be treated as a person or group
      within the meaning of subsection (i)(a) hereof. Further, no
      profit-sharing, employee stock ownership, employee stock purchase and
      savings, employee pension, or other employee benefit plan of the Company
      or any of its subsidiaries, and no trustee of any such plan in its
      capacity as such trustee, shall be treated as a person or group within the
      meaning of subsection (i)(a) hereof.

      "Code" means the Internal Revenue Code of 1986, as amended, and includes
any successor federal tax code. Any reference herein to a particular provision
of the Code shall include the valid regulations adopted thereunder and shall
also include any similar successor provisions or regulations hereafter in
effect, even though they may not bear the same designations or section numbers
as now in effect.

      "Company" includes the successors and assigns of the Company that become
bound by this Agreement.

      "Disability" means the inability of Executive, due to the condition of his
physical, mental or emotional health, to regularly and satisfactorily perform
the duties of his employment hereunder for a continuous period in excess of 180
days in a period of twelve (12) months. In the event that the existence of
Executive's Disability shall be disputed by either party, the determination by
two (2) physicians duly licensed to practice medicine in Michigan that such
Disability exists shall be necessary to establish such Disability, unless
Executive refuses to submit to appropriate examinations at the request of the
Company Board, which case the determination of the Company Board in good faith
and after the requisite period of Disability shall be conclusive as to whether
such Disability exists. If, after any period of Disability, Executive shall
resume the regular and satisfactory performance of the duties of his employment
hereunder for a continuous period of at least three (3) months, then such prior
Disability shall not thereafter be the basis for the establishment of a
Termination Date by reason of Disability.

                                      - 14-
<PAGE>


      "Executive's Beneficiary" means, at any time, the Person or Persons most
recently designated as such in writing by Executive and given to the Company, in
such form as the Company Board may reasonably prescribe if it so prescribes such
a form, or, in the absence of any such designation, Executive's estate.

      "Good Reason" means any of the following occurrences without the written
consent of Executive: (a) the assignment to Executive of any duties inconsistent
with his duties described in Section 1(a) hereof or any removal of Executive
from or any failure to reelect Executive to his positions described in Section
1(a) hereof, except in connection with promotions to higher office; provided,
that the suspension of Executive from the duties of his employment and any
positions held by him during the pendency of any criminal proceedings against
Executive as to which a conviction would constitute "Cause" shall not be deemed
"Good Reason" so long as during the period of such suspension the Company
continues to pay the Base Salary and provide the Additional Benefits to which
Executive is entitled; (b) the material reduction at any time of the Additional
Benefits theretofore provided to Executive; provided, that (i) reductions in the
actual economic value of Additional Benefits in accordance with the objective
terms of such Additional Benefits (e.g., changes in the amounts of bonus
payments from time to time in accordance with the objective terms of a bonus
formula) shall not be deemed a reduction of such Additional Benefits for this
purpose, and (ii) the replacement of Additional Benefits with other new
Additional Benefits having substantially equivalent economic value to Executive
shall not be deemed a reduction of Additional Benefits for this purpose; (c) the
relocation of Executive's office to anywhere other than a location within 25
miles of Executive's office provided for herein or the Company requiring
Executive to be based anywhere other than within 25 miles of Executive's office
on the date hereof, except for a required travel on the Company's business to an
extent consistent with Executive's business travel obligations; or (d) the
failure of the Company to pay Executive the Base Salary and provide the
Additional Benefits as and when required by Section 2 hereof; (e) any other
failure of the Company to perform its obligations to Executive hereunder if such
failure continues uncured for ten (10) days after written notice thereof,
specifying the nature of such failure and requesting that it be cured, is given
by Executive to the Company; or (f) the failure of the Company to obtain the
assumption of this Agreement by any successor of the Company as provided in
Section 12(b) hereof.

      "Option Pool" means the total number of issued and outstanding shares of
common stock of the Company following the consummation of the transactions
provided for in, and contemplated by, the Stock Purchase Agreement multiplied
by. 125.

      "Person" means an individual, corporation, partnership or other entity, or
a group of Persons acting in concert.

      "Termination Date" means the date so designated in Section 5 hereof.

      "Termination Payments" means the payments so designated in Section 6
hereof.

                                     - 15 -

<PAGE>

      IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

                                        NORTH COUNTRY FINANCIAL CORPORATION

                                        By______________________________________

                                                  Its___________________________

                                        ________________________________________
                                        Eliot R. Stark

                                     - 16 -

<PAGE>

                                  Schedule 5-2

                          Employment Agreement - Tobias

                                  See attached

                                     - 6 -
<PAGE>

                              EMPLOYMENT AGREEMENT

                                (PAUL D. TOBIAS)

      This Agreement, dated as of the 10th day of August, 2004, by and among
NORTH COUNTRY FINANCIAL CORPORATION, a Michigan corporation (the "Company"), and
PAUL D. TOBIAS ("Executive")

                                   WITNESSETH:

      WHEREAS, the Company desires to engage the services of Executive, and
Executive is willing to accept such employment, on the terms and conditions set
forth herein.

      NOW, THEREFORE, in consideration of the premises and the mutual
undertakings set forth herein the parties hereto agree as follows:

      1. Employment and Duties; Board Appointment. In accordance with actions
taken and authorized by the Board of Directors of the Company (the "Company
Board"), effective upon the Closing of the transactions provided for in the
Stock Purchase Agreement dated August 10, 2004 between the Company and NCFC
Recapitalization, LLC (the "Effective Date") Executive shall become employed and
appointed as the Chairman of the Board and Chief Executive Officer of the
Company and Chairman of the Board of the Bank and shall have the duties and
responsibilities commensurate with such titles and offices, including, without
limitation, all such duties and responsibilities as now are or hereafter may be
set forth with respect to such offices in the by-laws of the Company. In the
event, for whatever reason, Executive is not elected by the Company's
shareholders to the Company Board prior to the Effective Date, then as promptly
as practicable following the Effective Date, the Company Board shall take
necessary and appropriate action to appoint Executive as a director of the
Company and the Bank. During the period of his employment hereunder, Executive
also shall serve as an

<PAGE>

officer of such other affiliates of the Company and in such other capacities as
he may be requested by the Company Board and shall assume such additional duties
and responsibilities as from time to time may be assigned to him by the Company
Board, all without additional compensation therefore. Excluding any periods of
vacation (not less than 6 weeks per year) and sick leave to which the Executive
is entitled, the Executive agrees to devote his primary attention and time
during normal business hours to the business and affairs of the Company and, to
the extent necessary to discharge the responsibilities assigned to the Executive
hereunder, to use the Executive's reasonable best efforts to perform faithfully
and efficiently such responsibilities. During the Employment Period, it shall
not be a violation of this Agreement for the Executive to (a) serve on
corporate, civic or charitable boards or committees, (b) deliver lectures,
fulfill speaking engagements or teach at educational institutions and (c) own,
operate and manage investments or businesses other than banking institutions,
including Mackinac Partners, LLC, so long as such activities do not interfere
with the performance of the Executive's primary responsibilities as an executive
of the Company in accordance with this Agreement. It is expressly understood and
agreed that, to the extent that any such activities have been conducted by
Executive prior to the Effective Date, the continued conduct of such activities
(or the conduct of activities similar in nature and scope thereto) subsequent to
the Effective Date shall not thereafter be deemed to interfere with the
performance of the Executive's responsibilities to the Company.

      2. Term of Employment. The "Employment Period" of Executive hereunder
shall commence on the Effective Date and shall continue thereafter through the
third (3rd) anniversary of the Effective Date; provided, however, that,
commencing on the date one year after the Effective Date, and on each annual
anniversary of such date (such date and each annual

                                       -2-

<PAGE>

anniversary thereof, the "Renewal Date"), unless previously terminated, the
Employment Period shall be automatically extended so as to terminate three (3)
years from such Renewal Date, unless, at least 60 days prior to the Renewal
Date, the Company shall give notice to the Executive that the Employment Period
shall not be so extended. The Company shall employ Executive in accordance with
this Agreement for the Employment Period, unless Executive's employment is
terminated sooner as provided herein.

      3.    Compensation and Benefits.

      a.    During the Employment Period, the Company shall pay Executive a
            salary (the "Base Salary") at the rate herein provided, payable in
            arrears in accordance with the Company's normal payroll payment
            schedule for salaried employees, but not less often than monthly.
            Such payments of Base Salary shall be subject to all withholding
            with respect thereto as is required by applicable tax law, but shall
            otherwise be paid without deduction, offset or counterclaim unless
            Executive shall otherwise agree. The Base Salary shall initially be
            a the rate of $225,000 per year, but may be increased from time to
            time by the Company Board; and, upon the effectiveness of any such
            increase, such increased rate of salary shall become the "Base
            Salary" hereunder. In no event shall Executive's Base Salary in
            effect and any time during the Employment Period be reduced without
            Executive's consent.

      b.    After the Effective Date, but prior to March 31, 2005, the Company
            and Executive shall develop and implement an incentive plan or plans
            ("Incentive Plan(s)"), pursuant to which annual cash awards
            ("Bonus") may be earned by and paid to eligible employees (including
            Executive). In addition to Executive's Base Salary, Executive shall
            be entitled to receive an annual bonus in cash in accordance with
            such Incentive Plan(s), except that his Bonus for 2005 shall not be
            less than $25,000 and shall be paid no later than the first
            anniversary of the Effective Date, regardless of when (or whether)
            such Incentive Plan(s) are put into effect.

      c.    In addition to the Base Salary and Bonus, Executive shall receive
            such Additional Benefits as may be provided for him or to which he
            may become entitled from time to time, and nothing in this Agreement
            shall diminish any existing or future rights which Executive may
            have as to any Additional Benefits; provided, that the Company shall
            provide Executive, during the Employment Period, at least
            substantially all Additional Benefits which it generally provides at
            the time to its other management employees holding positions of
            comparable responsibility.

      d.    The Company shall reimburse Executive for all reasonable
            out-of-pocket expenses incurred by him in connection with his
            employment in accordance with

                                       -3-

<PAGE>

            the Company's expense reimbursement policies and procedures from
            time to time in effect and applicable to management employees. Such
            reimbursement shall include (i) a car allowance of $750 per month;
            (ii) a per diem reimbursement to Executive for each day he is in
            Manistique, Michigan during the term of this Agreement to cover
            Executive's living expenses, in the amount of at least One Hundred
            Dollars ($100.00) per day, not to exceed One Thousand Dollars
            ($1,000.00) in any calendar month; subject, however, to upward
            adjustment in the event Executive demonstrates his reasonable
            ordinary living expenses, including housing and meals, exceeds such
            per diem amount.

            e.    During the Employment Period, and unless and until the Company
                  shall provide Executive with an office and support staff in
                  Oakland County, Michigan for his principal office, the Company
                  shall pay the reasonable costs of the office in Oakland County
                  and personal secretarial and other assistance presently
                  maintained by him.

      4. Stock Options. As evidenced by a Stock Option Agreement to be entered
into between Executive and the Company (the "Option Agreement"), on the
Effective Date Executive shall be granted under the Company's 2000 Stock
Incentive Plan (the "Plan") so-called non-qualified stock options to purchase an
aggregate of 35% of the Option Pool of the Company at a price per share equal to
the price paid by Investors under the Stock Purchase Agreement and such other
terms and conditions specified in the Option Agreement. The Option Agreement
shall provide that if this Agreement is terminated other than pursuant to
Section 5.b. (death) or 5.d. (Cause), all such options (vested and unvested)
shall continue and may be exercised by Executive in accordance with their terms
as if this Agreement (and Executive's employment with the Company) had not
terminated. If this Agreement is terminated pursuant to Section 5.b. or 5.d.,
the options shall continue and shall be exercisable as provided in the Option
Agreement and the Plan.

      5. Termination of Employment. Executive's employment hereunder shall
continue until the first to occur during the Employment Period of the following
(the "Termination Date"):

            a.    That date specified in a written notice of termination (i)
                  given by the Company to the Executive if such termination by
                  the Company is other than for Cause or

                                       -4-

<PAGE>

                  Disability, or (ii) given by the Executive if the Termination
                  is for Good Reason; or

            b.    The date of Executive's death; or

            c.    That date, after the occurrence of Executive's Disability,
                  specified in a written notice of termination given by the
                  Company on or prior to such date; or

            d.    Provided Cause actually exists, the date on which the Company
                  gives Executive written notice of termination for Cause; or

            e.    Following the Change of Control, either (i) the date on which
                  Executive gives the Company written notice of termination for
                  Good Reason; or (ii) the date on which the Company terminates
                  Executive's employment hereunder otherwise than (A) for Cause
                  pursuant to clause (d) or (B) by reason of Executive's
                  Disability pursuant to clause (c); or

            f.    After a Change in Control occurs, that date specified in a
                  written notice of termination without Good Reason given by
                  Executive to the Company, provided such notice is given within
                  one year after the occurrence of such Change in Control; or

            g.    Such other Termination Date to which the Company and Executive
                  may mutually agree in writing.

      6. Termination Payments. Upon the Termination Date under the circumstances
described below, but in any event subject to Section 7 hereof, Executive shall
be entitled to receive from the Company, and the Company shall be obligated to
pay to Executive (or Executive's Beneficiary, as the case may be), the payments
(the "Termination Payments") described below (subject to adjustment as provided
in Section 7), in addition to all Base Salary, Bonus and expense reimbursement
theretofore accrued and otherwise payable to Executive, without deduction,
offset or counterclaim (other than such withholding with respect thereto as is
required by applicable law):

            a.    If the Termination Date is determined pursuant to Section 5(d)
                  (i.e., by the Company for Cause), then no Termination Payments
                  shall be payable.

            b.    If the Termination Date is determined pursuant to Section 5(a)
                  (i.e. by the Company without Cause and not due to Executive's
                  Disability), then for a period equal to three (3) years after
                  the Termination Date, the Company shall pay to Executive (or
                  Executive's Beneficiary if Executive shall die during such
                  three-

                                       -5-

<PAGE>

                  year period), (i) at the times at which Executive's Base
                  Salary would have been payable had his employment continued
                  during such period amounts equal to the Base Salary in effect
                  on the Termination Date; and (ii) at the times Bonuses are to
                  be paid under the Incentive Plan(s) or otherwise, a Bonus
                  equal to the highest Bonus or Bonuses awarded to Executive
                  during any fiscal year of the Company, including the fiscal
                  year in which the Termination Date occurs. In addition, for
                  the same three (3) year period plus the Company shall continue
                  benefits to Executive and Executive's family at least equal to
                  those described in Clauses (b) and (c) of the definition of
                  "Additional Benefits" and provided to Executive as of the
                  Termination Date.

            c.    If the Termination Date is determined pursuant to Section 5(b)
                  (i.e., by reason of Executive's death), then for a period of
                  one (1) year following the Termination Date the Company shall
                  pay to Executive's Beneficiary, at the times at which
                  Executive's Base Salary would have been payable had his
                  employment continued during such period, amounts equal to the
                  Base Salary (as in effect on the Termination Date) which would
                  have been payable during such period and shall continue for
                  the same period benefits to Executive and Executive's family
                  at least equal to those described in Clauses (b) and (c) of
                  the definition of "Additional Benefits" and provided to
                  Executive as of the Termination Date.

            d.    If the Termination Date is determined pursuant to Section 5(c)
                  (i.e., by reason of Executive's Disability), then for a period
                  of two (2) years following the Termination Date the Company
                  shall pay to Executive (or, if Executive shall die during such
                  two-year period, then to Executive's Beneficiary), at the
                  times at which Executive's Base Salary would have been payable
                  had the his employment continued during such period, amounts
                  equal to the Base Salary (as in effect on the Termination
                  Date) which would have been payable during such period and
                  shall continue for the same period benefits to Executive and
                  Executive's family at least equal to those described in
                  Clauses (b) and (c) of the definition of "Additional Benefits"
                  and provided to Executive as of the Termination Date. The
                  amount of Base Salary payable to Executive under this Section
                  6.d. may be reduced by the amounts actually received by
                  Executive under any long term disability insurance policy
                  obtained and paid for by the Company.

            e.    If the Termination Date is determined pursuant to Section 5(e)
                  (i.e. following a Change of Control, by Executive for Good
                  Reason or by the Company without Cause and not due to
                  Executive's Disability), then within ten (10) days after the
                  Termination Date the Company shall pay to Executive in cash or
                  equivalent a lump sum Termination Payment equal to 300% of the
                  aggregate of (i) Executive's annual Base Salary in effect on
                  the Termination Date; and (ii) the highest Bonus or Bonuses
                  awarded to Executive during any fiscal year of the Company,
                  including the fiscal year in which the Termination Date
                  occurs. In addition, for the period of three (3) years after
                  the Termination Date the Company shall continue benefits to
                  Executive and Executive's family equal to those described in
                  Clause (b) and (c) of the definition of "Additional Benefits"
                  and provided to the Executive as of the Termination Date.

                                          -6-

<PAGE>

            f.    If the Termination Date is determined pursuant to Section 5(f)
                  (i.e., by Executive after a Change of Control but without Good
                  Reason), then within ten (10) days after the Termination Date
                  the Company shall pay to Executive in cash or equivalent a
                  lump sum Termination Payment equal to 100% of the aggregate of
                  (i) Executive's annual Base Salary in effect on the
                  Termination Date; and (ii) the highest Bonus or Bonuses
                  awarded to Executive during any fiscal year of the Company,
                  including the fiscal year in which the Termination Date
                  occurs.

            g.    If the Termination Date is determined pursuant to Section 5(g)
                  (i.e., by mutual written agreement), then the amount and time
                  of payment of any Termination Payment, if any, in connection
                  therewith shall be as determined by mutual written agreement
                  of the Company and Executive.

      7. Adjustment of Termination Payments in Certain Events. Any provisions of
Section 6 hereof to the contrary notwithstanding, if a Change of Control shall
occur pursuant to which any Termination Payments to Executive are made, or if
and to the extent that any Termination Payments are "contingent on" (within the
meaning of such phrase as used in Section 280G(b)(i) of the Code) a Change of
Control, and in either case if the "aggregate present value" (as determined
pursuant to Section 280G of the Code) of the Termination Payments payable under
Section 6, plus any other payments required to be taken into account for
purposes of clause (ii) of Section 280G(b)(2)(A) of the Code, equals or exceeds
an amount equal to 300% of the Base Amount, then the amount of such Termination
Payments shall be reduced to that amount the aggregate present value of which,
when added to that of such other payments so required to be taken into account,
is equal to 295% of the Base Amount; provided, that no such reduction shall be
made unless, within 30 days after the Termination Date, the Company and
Executive shall have received an opinion of counsel having a favorable
reputation for expertise in matters of federal taxation (who may be counsel for
the company or for Executive) to the effect that in the absence of such
reduction the payment of the termination Payments as provided in Section 7 would
more likely than not constitute a "parachute payment" within the meaning of
Section 280G(b)(2) of the Code. Any required reduction of Termination Payments
payable

                                       -7-

<PAGE>

pursuant to Section 6(b), 6(c) or 6(d) shall be made by applying the amount of
the reduction to installments of such payments in inverse order of their due
dates.

      8. Interest, Collection Costs, Etc.

      (a)   In the event that the Company shall fail to pay to executive (or
Executive's Beneficiary, as the case may be) any Base Salary or Termination
Payments when due, then (a) the Company shall pay interest on any such unpaid
amount at the Applicable Interest Rate, computed from the due date of such
payment to the date it is paid, and (b) the Company shall indemnify Executive
(or Executive's Beneficiary, as the case may be) for, and pay over to Executive
(or Executive's Beneficiary, as the case may be) on demand, all costs and
expenses (including reasonable attorneys' and consultants' fees and expenses and
court costs) incurred by Executive (or Executive's Beneficiary, as the case may
be) in connection with his efforts to collect such payments and enforce the
obligations of the Company hereunder.

      (b)   Without limiting the Company's obligations under Section 8(a), in
the event of any dispute or controversy (including as to interpretation,
enforceability, breach or default) between the Employee and the Company relating
to this Agreement, the Option Agreement, the employment relationship between the
Employee and the Company, or any other matter related hereto or thereto, the
Company shall pay and reimburse Employee, as and when incurred, all costs and
expenses (including reasonable attorneys' and consultants' fees and expenses and
all court costs) incurred by Employee in, or as a result of, the dispute or
controversy, regardless of the eventual outcome of the dispute or controversy.

      (c)   All ambiguities arising under this Agreement or the Option
Agreement, or the interpretation of this Agreement or the Option Agreement,
shall be resolved in favor of the Employee.

                                      -8-

<PAGE>

      9. No Obligation to Mitigate. Executive shall not be required to mitigate
the benefits or amounts of any Termination payments provided for in this
Agreement by seeking other employment or otherwise, nor shall the amount of any
Termination Payment be reduced by any compensation earned by Executive as a
result of employment by another employer after the Termination Date, or
otherwise.

      10. Certain Continuing Obligations of Employee. Throughout the period of
his employment hereunder and thereafter, Executive agrees to keep confidential
all trade secrets, customer lists, business strategies, financial and marketing
information, and other data concerning the private affairs of the Company and
the Bank or any of their affiliates, made known to or developed by Executive
during the course of his employment hereunder ("Confidential Information"), not
to use any Confidential Information or supply Confidential Information to others
other than in furtherance of the Company's or Bank's business, and to return to
the Company upon termination of his employment all copies, in whatever form, of
all Confidential Information and all other documents relating to the business of
the Company or any of its affiliates which may then be in the possession or
under the control of Employee.

      At the request of the Company Board, whether or not made during the period
of his employment hereunder, Employee agrees to execute such confidentiality
agreements, assignments of intellectual property rights, and other documents as
hereafter may be reasonably determined by the Company Board to be appropriate to
carry out the purposes of this Section.

      11. Noncompetition and Nonsolitiation.

      (a) Executive agrees that, except as otherwise permitted or contemplated
by the terms hereof, he shall not engage in competitive activities (i) while
employed by the Company or the Bank; and (ii) if Executive's Termination Date is
determined under 5.a., 5.c. or 5.g. above or if

                                       -9-

<PAGE>

the Executive terminates his employment without Good Reason, pursuant to Section
5.f. above, during the Restricted Period. Executive shall be deemed to engage in
competitive activities if he shall, without the prior written consent of the
Company, (i) within a twenty-five (25) mile radius of the main office or any
branch office of the Bank, render services directly or indirectly, as an
employee, officer, director, consultant, advisor, partner or otherwise, for any
organization or enterprise which competes directly or indirectly with the
business of Company or any of its affiliates in providing financial products or
services (including, without limitation, banking or other services) then being
offered by the Company and such affiliates (and in the case of Executive's
Termination Date being determined under 5.a., 5.c. or 5.g., such business as of
the Termination Date) to consumers and businesses, or (ii) directly or
indirectly acquires any financial or beneficial interest in (except as provided
in the next sentence) any organization which conducts or is otherwise engaged in
a business or enterprise within a twenty-five (25) mile radius of the main
office or any branch office of the Bank, which competes directly or indirectly
with the business of the Company or the Bank or any of their affiliates in
providing financial products or services (including, without limitation,
banking, insurance or securities products or services) to consumers and
businesses. Notwithstanding the preceding sentence, Employee shall not be
prohibited from owning less than 5 percent of any publicly traded corporation
whether or not such corporation is in competition with the Company. For purposes
hereof, the term "Restricted Period" shall equal the period during which
payments in full are actually made to Executive pursuant to Section 6.b., 6.d.
or 6.g. above and in the case of a termination by the Executive without Good
Reason pursuant to section 5.f. above, one year from the effective date of the
termination.

      12.   Assignment, Delegation and Assumption.

                                      -10-
<PAGE>

      a.    Executive may assign his rights hereunder to Executive's Beneficiary
            effective upon Executive's death.

      b.    The Company may assign its rights and delegate its duties hereunder
            to a Person succeeding to all or substantially all of the Company's
            business and assets (whether by operation of law or otherwise),
            provided that such successor at the time of such succession assumes
            by operation of law or by express agreement all of the Company's
            obligations and duties hereunder; and the Company shall so assign
            its rights and delegate its duties, and cause such successor to so
            assume all of its duties and obligations hereunder, upon any
            transfer by the Company of all or substantially all of its business
            and assets to another Person (whether by operation of law or
            otherwise) during the Employment Period, as it may be extended.
            Notwithstanding such assignment, delegation and assumption, the
            Company shall not be released from its primary liability for its
            obligations hereunder without Executive's written consent.

      c.    Except as otherwise expressly provided above, neither party may
            assign its rights or delegate its duties hereunder without the
            written consent of the other party.

13.   Miscellaneous.

      a.    Notices. Any notice to be given to a party in connection with this
            Agreement shall be in writing addressed to such party at such
            party's "Notice Address" set forth below such party's signature
            hereto, which Notice Address may be changed from time to time by
            such party by notice thereof to the other party as herein provided.
            Any such notice shall be deemed effectively given to a party when
            mailed to such party by first class registered or certified United
            States Mail, postage prepaid, addressed to such party at such
            party's Notice Address, or, if earlier, when actually delivered to
            such party's Notice Address directed to such party.

      b.    Integration. This Agreement constitutes the final, complete and
            exclusive statement of the agreement between the parties hereto as
            to the subject matter hereof, and all other prior or contemporaneous
            oral or written agreements of the parties hereto with respect to the
            subject matter hereof are merged herein and superseded hereby.

      c.    Amendment. This Agreement may be modified or amended only by express
            agreement of the parties in writing, assenting to such modification
            or amendment.

      d.    Waivers. No waiver by any party of any provision hereof or part
            thereof at any time shall constitute or evidence a waiver by such
            party of any other provision or other part of such provision or of
            the same provision or part at any other time.

      e.    Severability. The parties have entered into this Agreement for the
            purposes herein expressed, with the intention that this Agreement be
            given full effect to carry out such purposes. Therefore, consistent
            with the effectuation of the

                                      -11-
<PAGE>

            purposes hereof, the invalidity or unenforceability of any provision
            hereof or part thereof shall not affect the validity or
            enforceability of any other provision hereof or an other part of
            such provision.

      f.    Benefits and Binding Effect. This Agreement shall inure to the
            benefit of and be binding upon the parties hereto and their
            respective heirs, successors, personal representatives and permitted
            assigns.

      g.    Governing Law. The validity, construction and effect of this
            Agreement shall be governed by the substantive laws of the State of
            Michigan.

      h.    Headings and Captions. The headings and captions of the Sections and
            subsections of this Agreement are for convenience of reference only,
            and shall not affect the construction hereof.

      i.    Counterparts. This Agreement may be executed by the parties in
            multiple counterparts, each of which shall be deemed an original.

      j.    Regulatory Approval. The Company and Executive agree to use their
            respective best efforts to obtain such approval of bank regulatory
            authorities as may be required for the payment of any Termination
            Payments as shall be or become subject to the prior approval of such
            regulatory authorities in accordance with the provisions of any
            statute or regulation applicable to the Company or any affiliate
            thereof at the time payment is to be made in accordance with this
            Agreement.

      14.   Definitions. As used in this Agreement, the following terms have the
following respective meanings:

      "Additional Benefits" means (a) participations in bonus and incentive
compensation plans or pools, stock option, bonus, award or purchase plans,
retirement plans, and other employee benefit plans of the Company; (b) life,
health, medical, dental, accident, and other personal insurance coverage
provided by the Company for employees or their dependents; (c) directors' and
officers' liability insurance coverage provided by the Company and charter or
bylaw provisions or contracts providing for indemnification of corporate
personnel or elimination or limitation of their liabilities as such; (d) club
memberships, use of the Company automobiles, use of other Company property and
facilities and other perquisites of employment with the Company; (e) paid
vacation, leave or holidays; and (f) any and all other compensation, benefits
and perquisites of employment with the Company other than Base Salary.

      "Applicable Interest Rate" means (i) if a Change of Control shall occur
pursuant to which any payments to Executive are made, or if payment of the
amount upon which interest at such rate is computed is contingent on a Change of
Control, the rate per annum equal to 120% of the "applicable federal rate"
(determined under Section 1274(d) of the Code), compounded semiannually, or (ii)
if no Change of Control shall occur and payment of the amount upon which
interest at such rate is computed is not contingent on a Change of Control, the
greater of the rate described in clause (i) of this definition or 4% plus the
rate of interest per annum announced by

                                      -12-
<PAGE>

Comerica Bank (or a successor to substantially all of the commercial banking
business of such bank) as its prime rate as from time to time in effect, but
(iii) in any event, not in excess of the highest rate of interest permitted by
applicable law.

      "Bank" means North Country Bank and Trust, a Michigan banking corporation
and a wholly-owned subsidiary of the Company.

      "Base Amount" means Executive's "base amount" as defined in Section
280G(b)(3)(A) of the Code.

      "Base Salary" means the amount per annum so designated as described in
Section 2(a) of this Agreement.

      "Cause" means: (i) the willful and continued failure of the Executive to
perform substantially the Executive's duties with the Company (other than any
such failure resulting from incapacity due to physical or mental illness or
following the Executive's delivery of a notice of termination for Good Reason),
after a written demand for substantial performance is delivered to the Executive
by the Company Board that specifically identifies the manner in which the
Company Board believes that the Executive has not substantially performed the
Executive's duties, or (ii) the willful engaging by the Executive in illegal
conduct or gross misconduct that is materially and demonstrably injurious to the
Company. No act, or failure to act, on the part of the Executive shall be
considered "willful" unless it is done, or omitted to be done, by the Executive
in bad faith or without reasonable belief that the Executive's action or
omission was in the best interests of the Company. Any act, or failure to act,
based upon authority given pursuant to a resolution duly adopted by the Company
Board or a senior officer of the Company or based upon the advice of counsel for
the Company shall be conclusively presumed to be done, or omitted to be done, by
the Executive in good faith and in the best interests of the Company. The
cessation of employment of the Executive shall not be deemed to be for Cause
unless and until there shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than three-quarters
of the entire membership of the Company Board (excluding the Executive) at a
meeting of the Board called and held for such purpose (after reasonable notice
is provided to the Executive and the Executive is given an opportunity, together
with counsel for the Executive, to be heard before the Company Board), finding
that, in the good faith opinion of the Company Board, the Executive is guilty of
the conduct described and specifying the particulars thereof in detail.

      "Change of Control" shall occur if:

      i.    Any person or group (as such terms are used in connection with
            Sections 13(d) and 14(d) of the Exchange Act) becomes the
            "beneficial owner" (as defined in Rule 13(d)(3) and 13(d)(5) under
            the Exchange Act), directly or indirectly, of securities of the
            Company representing twenty-five percent (25%) or more of the
            combined voting power of the Company's then outstanding securities;

      ii.   A merger, consolidation, sale of assets, reorganization, or proxy
            contest is consummated and, as a consequence of which, members of
            the Company Board in

                                      -13-
<PAGE>

            office immediately prior to such transaction or event constitute
            less than a majority of the Board thereafter;

      iii.  During any period of 24 consecutive months, individuals who at the
            beginning of such period constitute the Company Board (including for
            this purpose any new director whose election or nomination for
            election by the Company's stockholders was approved by a vote of at
            least one-half of the directors then still in office who were
            directors at the beginning of such period) cease for any reason to
            constitute at least a majority of the Company Board; or

      iv.   A merger, consolidation or reorganization is consummated with any
            other corporation pursuant to which the shareholders of the Company
            immediately prior to the merger, consolidation or reorganization do
            not immediately thereafter directly or indirectly own more than
            fifty percent (50%) of the combined voting power of the voting
            securities entitled to vote in the election of directors of the
            merged, consolidated or reorganized entity.

      Notwithstanding the foregoing, no trust department or designated fiduciary
      or other trustee of such trust department of the Company or a subsidiary
      of the Company, or other similar fiduciary capacity of the Company with
      direct voting control of the stock shall be treated as a person or group
      within the meaning of subsection (i)(a) hereof. Further, no
      profit-sharing, employee stock ownership, employee stock purchase and
      savings, employee pension, or other employee benefit plan of the Company
      or any of its subsidiaries, and no trustee of any such plan in its
      capacity as such trustee, shall be treated as a person or group within the
      meaning of subsection (i)(a) hereof.

      "Code" means the Internal Revenue Code of 1986, as amended, and includes
any successor federal tax code. Any reference herein to a particular provision
of the Code shall include the valid regulations adopted thereunder and shall
also include any similar successor provisions or regulations hereafter in
effect, even though they may not bear the same designations or section numbers
as now in effect.

      "Company" includes the successors and assigns of the Company that become
bound by this Agreement.

      "Disability" means the inability of Executive, due to the condition of his
physical, mental or emotional health, to regularly and satisfactorily perform
the duties of his employment hereunder for a continuous period in excess of 180
days in a period of twelve (12) months. In the event that the existence of
Executive's Disability shall be disputed by either party, the determination by
two (2) physicians duly licensed to practice medicine in Michigan that such
Disability exists shall be necessary to establish such Disability, unless
Executive refuses to submit to appropriate examinations at the request of the
Company Board, which case the determination of the Company Board in good faith
and after the requisite period of Disability shall be conclusive as to whether
such Disability exists. If, after any period of Disability, Executive shall
resume the regular and satisfactory performance of the duties of his employment

                                      -14-
<PAGE>

hereunder for a continuous period of at least three (3) months, then such prior
Disability shall not thereafter be the basis for the establishment of a
Termination Date by reason of Disability.

      "Executive's Beneficiary" means, at any time, the Person or Persons most
recently designated as such in writing by Executive and given to the Company, in
such form as the Company Board may reasonably prescribe if it so prescribes such
a form, or, in the absence of any such designation, Executive's estate.

      "Good Reason" means any of the following occurrences without the written
consent of Executive: (a) the assignment to Executive of any duties inconsistent
with his duties described in Section l(a) hereof or any removal of Executive
from or any failure to reelect Executive to his positions described in Section
l(a) hereof, except in connection with promotions to higher office; provided,
that the suspension of Executive from the duties of his employment and any
positions held by him during the pendency of any criminal proceedings against
Executive as to which a conviction would constitute "Cause" shall not be deemed
"Good Reason" so long as during the period of such suspension the Company
continues to pay the Base Salary and provide the Additional Benefits to which
Executive is entitled; (b) the material reduction at any time of the Additional
Benefits theretofore provided to Executive; provided, that (i) reductions in the
actual economic value of Additional Benefits in accordance with the objective
terms of such Additional Benefits (e.g., changes in the amounts of bonus
payments from time to time in accordance with the objective terms of a bonus
formula) shall not be deemed a reduction of such Additional Benefits for this
purpose, and (ii) the replacement of Additional Benefits with other new
Additional Benefits having substantially equivalent economic value to Executive
shall not be deemed a reduction of Additional Benefits for this purpose; (c) the
relocation of Executive's office to anywhere other than a location within 25
miles of Executive's office provided for herein or the Company requiring
Executive to be based anywhere other than within 25 miles of Executive's office
on the date hereof, except for a required travel on the Company's business to an
extent consistent with Executive's business travel obligations; or (d) the
failure of the Company to pay Executive the Base Salary and provide the
Additional Benefits as and when required by Section 2 hereof; (e) any other
failure of the Company to perform its obligations to Executive hereunder if such
failure continues uncured for ten (10) days after written notice thereof,
specifying the nature of such failure and requesting that it be cured, is given
by Executive to the Company; or (f) the failure of the Company to obtain the
assumption of this Agreement by any successor of the Company as provided in
Section 12(b) hereof.

      "Option Pool" means the total number of issued and outstanding shares of
common stock of the Company following the consummation of the transactions
provided for in, and contemplated by, the Stock Purchase Agreement multiplied
by. 125.

      "Person" means an individual, corporation, partnership or other entity, or
a group of Persons acting in concert.

      "Termination Date" means the date so designated in Section 5 hereof.

      "Termination Payments" means the payments so designated in Section 6
hereof.

                                      -15-
<PAGE>

      IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

                                      NORTH COUNTRY FINANCIAL CORPORATION

                                     By________________________________________

                                                 Its___________________________

                                     __________________________________________
                                     Paul D. Tobias

                                      -16-
<PAGE>

                                  Schedule 5-3

                          Employment Agreement - Bess

                                  See attached

                                       6-1
<PAGE>

                              EMPLOYMENT AGREEMENT

                                (C. JAMES BESS)

      This Agreement, dated as of the____________day of August, 2004, by and
among NORTH COUNTRY FINANCIAL CORPORATION, a Michigan corporation (the
"Company"), and C. JAMES BESS ("Employee")

                                   WITNESSETH:

      WHEREAS, the Company desires to engage the services of Employee, and
Employee is willing to accept such employment, on the terms and conditions set
forth herein.

      NOW, THEREFORE, in consideration of the premises and the mutual
undertakings set forth herein the parties hereto agree as follows:

      1.    Employment and Duties. In accordance with actions taken and
authorized by the Board of Directors of the Company (the "Company Board"),
effective upon the Closing of the transactions provided for in the Stock
Purchase Agreement dated August_____, 2004 between the Company and NCFC
Recapitalization, LLC (the "Effective Date"), Employee shall become employed and
appointed as the President and Chief Operating Officer of the Company's
wholly-owned subsidiary, North Country Bank and Trust (the "Bank"), and shall
have the duties and responsibilities commensurate with such titles and offices,
including, without limitation, all such duties and responsibilities as now are
or hereafter may be set forth with respect to such offices in the by-laws of the
Bank. During the period of his employment hereunder, Employee also shall serve
as an officer of such other affiliates of the Bank or the Company and in such
other capacities as he may be requested by the Company Board and shall assume
such additional duties and responsibilities as from time to time may be assigned
to him by the Company Board, all without additional compensation therefor.
Throughout the period of his employment

<PAGE>

hereunder, Employee shall devote his business time, attention, and energy on a
full-time basis exclusively to the affairs of the Bank and the Company and its
affiliates.

      2.    Term of Employment. The employment of Employee hereunder shall
commence on the Effective Date and shall continue thereafter through the end of
the eighteenth (18th) month following the Effective Date (the "Employment
Period"), unless earlier terminated as hereinafter provided. After the initial
Employment Period, the term of this Agreement shall be automatically extended
for additional one-year periods unless written notice is given by one party to
the other of his or its intention to terminate Employee's employment hereunder
at the end of the Employment Period or any extended term, as the case may be.

      3.    Cash Compensation. As full cash compensation for all services to be
performed by Employee hereunder, the Company shall pay to Employee the
following:

            (a)   salary at the rate of $250,000 per year (to be reviewed
      annually by the Company Board), payable at the intervals at which other
      executive officers of the Company and the Bank are paid;

            (b)   an additional incentive bonus (if earned) payable after fiscal
      year-end in accordance with the Company's or Bank's policy or plan.

      4.    Certain Fringe Benefits. During the period of his employment
hereunder, the Company will provide a per diem reimbursement to Employee for
each day he is in Manistique, Michigan during the term of this Agreement to
cover Employee's living expenses, in the amount of at least One Hundred Dollars
($100.00) per day, not to exceed One Thousand Dollars ($1,000.00) in any
calendar month, subject however, to upward adjustment with the consent of the
Company on which shall not unreasonably be withheld, in the event the Employee
demonstrates his reasonable ordinary living expenses, including housing and
meals, exceeds

                                      -2-
<PAGE>

such per diem amount. In addition, the Company will provide Employee with the
use of the 2004 GMC Denali presently used by him.

      5.    Other Employee Benefits. During the period of his employment
hereunder, Employee also shall be entitled to participate in such Company
employee benefit plans as from time to time are maintained, sponsored, or made
available to the executive employees of the Company and the Bank generally, in
each case on the same terms and subject to the same conditions and limitations
generally applicable to other executive officers with respect to participation
therein. Employee shall be entitled to six weeks of vacation per year, for a
total of nine weeks over the Employment Period. Vacation time not taken during
an applicable period will terminate and will not be compensated for.

      6.    Certain Expenses. The Company shall pay or reimburse Employee for
the reasonable travel, entertainment and other incidental expenses (including
the cost of business publications and professional associations) incurred on
business of the Company or the Bank with the approval of the Chairman of the
Company, and in accordance with the Company's practices as in effect during the
term of this Agreement as applied to executive officers.

      7.    Certain Continuing Obligations of Employee. Throughout the period of
his employment hereunder and thereafter, Employee agrees to keep confidential
all trade secrets, customer lists, business strategies, financial and marketing
information, and other data concerning the private affairs of the Company and
the Bank or any of their affiliates, made known to or developed by Employee
during the course of his employment hereunder ("Confidential Information"), not
to use any Confidential Information or supply Confidential Information to others
other than in furtherance of the Company's or Bank's business, and to return to
the Company upon termination of his employment all copies, in whatever form, of
all

                                      -3-
<PAGE>

Confidential Information and all other documents relating to the business of the
Company or any of its affiliates which may then be in the possession or under
the control of Employee.

      At the request of the Company Board, whether or not made during the period
of his employment hereunder, Employee agrees to execute such confidentiality
agreements, assignments of intellectual property rights, and other documents as
hereafter may be reasonably determined by the Company Board to be appropriate to
carry out the purposes of this Section.

      8.    Termination of Employment; Effect.

            (a)   Employee's employment hereunder will be terminated in any of
      the following ways:

                  (i)   Immediately upon the death of the Employee;

                  (ii)  Immediately upon the Employee becoming disabled due to
            his physical or mental condition to regularly and satisfactorily
            perform his duties hereunder (as determined by the Company Board)
            for a period of three (3) continuous months;

                  (iii) By either the Employee or the Company giving notice of
            his or its intention not to extend this Agreement's term as provided
            in Section 2 above, in which case Employee's employment will
            terminate at the end of the Employment Period or extended term, as
            the case may be; or

                  (iv)  By either the Employee or the Company, without or with
            Cause (as hereinafter defined), by 30 days' prior written notice to
            the other, effective as of the date specified in such notice.

            (b)   Upon the termination of Employee's employment in any of the
      ways provided in subsection (a), then this Agreement and all rights and
      obligations of

                                      -4-
<PAGE>



      Employee and the Company hereunder (as opposed to rights and obligations
      under any Company employee benefit plan in which Employee participated)
      shall terminate and cease immediately, except for (i) Employee's rights to
      the payments provided in Section 9 below; and (ii) the rights and
      obligations set forth in Section 7 above and Section 12 below.

            9.    Payments On Termination. Employee shall be entitled to the
      following payments and benefits upon termination of his employment:

            (a)   If Employee's employment is terminated under Section 8(a)(i)
      above (by reason of death), or if Employee's employment is terminated by
      Employee under Section 8(a)(iii) above (no extension), or if Employee's
      employment is terminated (either voluntarily by Employee or for Cause by
      the Company) under Section 8(a)(iv) above, then Employee shall be entitled
      to the cash compensation under Section 3(a) above, and the benefits to
      which Employee is entitled under Sections 4 and 5 above, through the date
      of termination of employment.

            (b)   If Employee's employment is terminated under Section 8(a)(ii)
      above (disability), or by the Company, either without Cause under Section
      8(a)(iv) above or pursuant to Section 10(a)(iii) above (no extension),
      Employee shall be entitled to the cash compensation payable under Section
      3(a) above, for a period of one year following the effectiveness of such
      termination of employment; provided, however, that in the event
      termination of employment occurs during the initial Employment Period,
      such payments and benefits shall continue for the shorter of one year
      following termination, or the balance of the initial Employment Period.

      10.   Definition. For purposes of this Agreement, "Cause" means any of the
      following:

                                      -5-
<PAGE>

            (a)   Material breach of any of the terms of this Agreement or of
      the Company's or Bank's policies and procedures applicable to employees
      and/or directors;

            (b)   Conviction of or plea of guilty or nolo contendere to a crime
      involving moral turpitude or involving any violation of securities or
      banking law or regulation, or the issuance of any court or administrative
      order enjoining or prohibiting Employee from violating any such law or
      regulation;

            (c)   Repeated or habitual intoxication with alcohol or drugs while
      on the premises of the Company or the Bank or any of their affiliates, or
      during the performance by Employee of any of his duties hereunder;

            (d)   Embezzlement of any property belonging or entrusted to the
      Company or the Bank, or any of their affiliates;

            (e)   Willful misconduct or gross neglect of duties, or failure to
      act with respect to duties or actions previously communicated to Employee
      in writing by the Company Board;

            (f)   Any other act or omission of kind or nature similar to any of
      the foregoing, or determined in good faith by the Company Board to be of
      comparable seriousness, which in the good faith judgment of the Company
      Board may have adversely affected or may in the future adversely affect
      the Company, the Bank or any of their affiliates, or has irreparably
      damaged Employee's continued ability to function effectively in any of the
      capacities contemplated by this Agreement.

      11.   Integration; Amendment. This Agreement contains the entire agreement
of the parties relating to the subject matter hereof and thereof, and together
supersede and replace in their entirety any prior agreements or understandings
concerning such subject matter, including

                                      -6-
<PAGE>

the Employment Agreement dated August 1, 2003 between the Company and Employee.
This Agreement may not be waived, changed, modified, extended, or discharged
orally, but only by agreement in writing signed in the case of the Company by
the Chairman or Vice Chairman of the Company Board.

      12.   Arbitration. Any controversy, dispute, or claim arising out of or
relating to Employee's employment or to this Agreement or breach thereof shall
be settled by arbitration in accordance with the commercial rules of the
American Arbitration Association at its Southfield, Michigan offices. Judgment
upon any award may be entered in any circuit court or other court having
jurisdiction thereof, without notice to the opposite party or parties. Anything
contained herein to the contrary notwithstanding, this agreement to arbitrate
shall not be deemed to be a waiver of the Company's right to secure equitable
relief including injunction (whether as part of or separate from the arbitration
proceeding) if and when otherwise appropriate.

      13.   Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan applicable to contracts made
and to be performed within such State.

      14.   Regulatory Approval. The Company and Employee agree to use their
respective best efforts to obtain such approval of bank regulatory authorities
as may be required for the payment of any termination payments as shall be or
become subject to the prior approval of such regulatory authorities in
accordance with the provisions of any statute or regulation applicable to the
Company or any affiliate thereof at the time payment is to be made in accordance
with this Agreement.

                                      -7-
<PAGE>

      IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

                                        NORTH COUNTRY FINANCIAL CORPORATION

                                        By_____________________________________

                                                 Its___________________________

                                        _______________________________________
                                        C. James Bess

                                      -8-
<PAGE>

                                   Schedule 6

                                    RESERVED

                                      5-2
<PAGE>

                                   Schedule 7
         Additional Indemnification and Other Covenants of North Country

Section 1. Indemnification.

      (a)   Indemnification of NCFC Recapitalization. North Country agrees to
indemnify and hold harmless NCFC Recapitalization and each person, if any, who
controls NCFC Recapitalization within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act as follows:

            (i)   against any and all Damages whatsoever, as incurred, arising
      out of any untrue statement or alleged untrue statement of a material fact
      contained in the Offering Documents, the Proxy Statement, any related
      materials or this Agreement (or any amendment to any of them) or the
      omission or alleged omission therefrom of a material fact necessary in
      order to make the statements therein, in the light of the circumstances
      under which they were made, not misleading;

            (ii)  against any and all Damages whatsoever, as incurred, to the
      extent of the aggregate amount paid in settlement of any litigation, or
      any investigation or proceeding by any governmental agency or body,
      commenced or threatened, or of any claim whatsoever based upon any such
      untrue statement or omission, or any such alleged untrue statement or
      omission, provided that (subject to subsection (c) below) any such
      settlement is effected with the written consent of North Country; and

            (iii) against any and all expense whatsoever, as incurred (including
      the fees and disbursements of counsel chosen by NCFC Recapitalization),
      reasonably incurred in investigating, preparing or defending against any
      litigation, or any investigation or proceeding by any governmental agency
      or body, commenced or threatened, or any claim whatsoever based upon any
      such untrue statement or omission, or any such alleged untrue statement or
      omission;

provided, however, that this indemnity provision shall not apply to any Damages
or expense to the extent arising out of any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with written information referred to in the last sentence of Section 7.13(b).

      (b)   Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. Counsel to the indemnified parties shall be selected by NCFC
Recapitalization. An indemnifying party may participate at its own expense in
the defense of any such action; provided, however, that counsel to the
indemnifying party shall not (except with the consent of the indemnified party)
also be counsel to the indemnified party. In no event shall the indemnifying
parties be liable for fees and expenses of more than one counsel (in addition to
any local counsel) separate from their own counsel for all indemnified parties
in connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Schedule 7 (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent: (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim; and (ii)
does not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party.

      (c)   Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of

<PAGE>

counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by this Section effected without its
written consent if: (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request; (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into; and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.

Section 2. Contribution. If the indemnification provided for in Section 1 of
this schedule 7 is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any Damages referred to therein,
then each indemnifying party shall contribute to the aggregate amount of such
Damages incurred by such indemnified party, as incurred: (i) in such proportion
as is appropriate to reflect the relative benefits received by North Country on
the one hand and NCFC Recapitalization on the other hand from the Offering of
the North Country Shares pursuant to the Offering Documents and this Agreement;
or (ii) if the allocation provided by clause (i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above, but also the relative fault of North
Country on the one hand and of NCFC Recapitalization on the other hand in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.

      The relative benefits received by North Country on the one hand and NCFC
Recapitalization on the other hand in connection with the Offering of the North
Country Shares pursuant to the Offering Documents and this Agreement shall be
deemed to be in the same respective proportion as the total net proceeds from
the Offering (before deducting expenses) received by North Country and the
reimbursement of expenses received by NCFC as set forth in this Agreement.

      The relative fault of North Country on the one hand and NCFC
Recapitalization on the other hand shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by North Country or by NCFC Recapitalization and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.

      North Country and NCFC Recapitalization agree that it would not be just
and equitable if contribution pursuant to this Section 2 of this schedule 7 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
Section. The aggregate amount of Damages incurred by an indemnified party and
referred to above in this Section shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission.

      Notwithstanding the provisions of this Section, NCFC Recapitalization
shall not be required to contribute any amount in excess of the total expense
reimbursement received by NCFC Recapitalization as set forth herein.

      No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.

      For purposes of this Section, each person, if any, who controls NCFC
Recapitalization within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as NCFC
Recapitalization, and each director of North Country and each executive officer
of North Country shall have the same rights to contribution as North Country.